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Sat, Jun 13, 2009 - Page 10 News List

Sweden luxury car firm to buy Saab from GM: report

AFP , STOCKHOLM

Swedish luxury sports car maker Koenigsegg will buy Saab Automobile from US giant General Motors (GM) with the backing of Norwegian investors, Swedish TV reported on Thursday.

The buyers have signed a letter of intent to buy Saab, SVT said on its Web site, citing anonymous sources naming Koenigsegg and adding that the negotiations could last for months.

DEAL

“We are getting close to a deal done, but there are some final steps to be taken,” a source close to the matter said, but would not confirm the identity of the leading bidder.

Both Saab and its parent company GM declined comment.

Saab was put up for sale by GM, which filed for bankruptcy after being brought to its knees by falling demand amid the world economic downturn.

Saab’s reorganization process began separately in Swedish courts in February.

LUXURY

Koenigsegg, set up in 1994, produces just 20 of its deluxe sports cars a year and sells each one for more than 1 million euros (US$1.4 million).

Saab’s sell-off drew a little closer on Thursday after Stockholm announced it had authorized the Swedish Debt Office, which acts as a public bank to the state, to discuss guaranteeing a 500 million euro loan made to Saab by the European Investment Bank.

“We have always said that the debt office could start negotiations on guaranteeing the loan when Saab has a new owner,” state secretary for business Joran Hagglund said in a statement. “With today’s decision we are well prepared for that.”

NO BAILOUT

Stockholm had refused to follow Washington’s lead in bailing out its automakers over fears it would end up in GM’s pockets.

Saab has not named its suitors but British daily the Financial Times had named Koenigsegg plus two other bidders, the US investment firms Renco and Merbanco.

Media reports had also said Italy’s Fiat was keen on buying Saab, but observers say such a move is now unlikely because of Fiat’s failure to acquire GM’s other European brand Opel.

Opel and its sister marque, Vauxhall, share a lot of technology with Saab.

DEFENSE

The Saab automaker — not to be confused with a Swedish defense company also called Saab — sold 93,000 cars worldwide last year, its Web site said.

It owes 9.7 billion kronor (US$1.3 billion) to GM — its largest individual creditor — as well as 347 million kronor to the Swedish government. Other creditors are owed 647 million kronor.

Saab, the automaker, employs about 3,400 people in Sweden. Including suppliers, 15,000 jobs in the country are believed to be at risk if the company were to disappear.

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