GM and Koenigsegg signed a stock purchase agreement for advancing Saab sale

DETROIT : August 18, 2009 - General Motors Co. reached a deal Tuesday to sell its money-losing Swedish subsidiary Saab to Koenigsegg Group AB.


The companies signed a stock purchase agreement that would give the group 100 percent of Saab's shares, GM Europe said in a statement.

Koenigsegg Group is a consortium of private investors that includes Koenigsegg Automotive AB, a tiny Swedish maker of $1 million supercars.

"This contract is an important step in the journey to a potential deal," GM Europe President Carl-Peter Forster said in the statement. "We will continue to work with all parties to define the final details and ensure a fast closure."

The agreement comes after weeks of uncertainty concerning the level of support for the bid from Koenigsegg's backers, after a preliminary deal for the sale was struck in June.

Figuring out the finances

The Swedish government is negotiating with Koenigsegg on a possible guarantee for a loan to Saab from the European Investment Bank.

Forster said that the deal is contingent on this funding being arranged.

Sweden's industry ministry said several steps remained to be taken before a transaction could be concluded.

"The Koenigsegg Group will inject more private capital, negotiate loans with the European Investment Bank and agree with the Swedish National Debt Office on the terms for possible state loan guarantees," Joran Hagglund, industry ministry state secretary, said in a statement.

Swedish daily business newspaper Dagens Industri reported today that Koenigsegg Chairman Augie Fabela said 3 billion Swedish crowns ($413.6 million) of financing were still required in addition to the EIB loan.

Different timetables

Koenigsegg spokeswoman Halldora von Koenigsegg told Reuters today that the firm expected to close the deal within about a month, while GM said it saw the deal closing by the end of the year.

As part of the proposal, GM and Saab will continue to share technology and services for a set time period. GM did not say how long the two companies would work together. GM and Saab will use license and service agreements to manager their future relationship.

In the GM Europe statement, Koenigsegg Group CEO Christian von Koenigsegg said his company plans to "transform Saab into a stand-alone vibrant entrepreneurial company and make it 'sustainable' by making it profitable."

[Source : REUTERS via Automotive News]