EIB loan opens the door to Saab sale

[Hurricane]

EIB loan opens the door to Saab sale
By Andrew Ward in Stockholm and John Reed in London

Published: October 21 2009 19:39 | Last updated: October 21 2009 19:39

Saab Automobile on Wednesday secured a €400m ($600m) loan from the European Investment Bank in a crucial step towards its proposed takeover by a Swedish-Chinese consortium.

The funds were a key condition of a provisional deal for General Motors to sell its loss-making Swedish brand to Koenigsegg Automotive, the maker of high-performance sportscars.

But it cautioned that the funds were subject to a guarantee from the Swedish government and approval from EU competition authorities, neither of which have been secured.

Further negotiations were needed with Koenigsegg before the government would guarantee the loan, he added.

Koenigsegg announced last month that Beijing Automotive Industry Holding Co had joined its consortium with the promise of €275m of investment and a deal to expand the Saab brand in China.

Sweden’s centre-right government has been slow to offer support for Saab and the country’s other global car brand, Volvo – owned by Ford – as the pair fight for survival.

Wednesday’s step forward for Saab came as efforts to find a buyer for Volvo also entered a crucial stage.

Representatives of Ford and Geely, the front-running bidder for Volvo, held talks in London this week in an effort to bridge outstanding differences. Two people close to the Chinese company said these included price and Geely’s future access to Ford’s intellectual property.

Geely said last month that it might work with Chinese state investment companies on its bid, and is the only bidder to have made its interest public.

The Hong Kong-listed carmaker offered about $2bn for Volvo.

Intellectual property has been a key sticking point in the deal talks for Ford, which is worried about giving too much away in the sale as Volvo’s vehicles share technology and components with its own.

Full text here: http://www.ft.com/cms/s/0/9bc0b8b6-b...44feab49a.html

[Quickening]

Make it happen!

[Flyingbunnys]

I was wondering who is paying what Saab is losing at this point is every day this drags out a cost to GM? You would think as much as our government has already handed out perhaps it would help if this were the case.

[rsbaker]

When did the Chinese get in this? There goes every scrap of GM intellectual property out the window. Hummer was bad enough but now SAAB.

[jokuvaan]

I was wondering who is paying what Saab is losing at this point is every day this drags out a cost to GM?

As far as I know, GM gave fixed sum that keeps Saab alive this year. But its not enough to ramp-up production, Saab has had to make choices.

[Neanderthal]

EIB? What, Rush is buying Saab?

That's so like way way different from the NFL, like!