General Motors Corp. agreed to sell its insolvent Saab Automobile AB unit to Koenigsegg Automotive AB, a Swedish maker of luxury sports cars, ending a 19-year engagement.
The sale is linked to a $600 million loan by the European Investment Bank that's backed by the Swedish government, General Motors spokesman Chris Preuss said by telephone today. Koenigsegg will gain full control of Saab, while GM will maintain a relationship with the division, he said. He declined to comment on financial details of the transaction.
GM'S choice of Koenigsegg, partly owned by Norwegian entrepreneur Baard Eker's Eker Group AS, returns the Swedish carmaker to Nordic hands after GM bought Saab in two stages from the Wallenberg family. GM, which has been operating under U.S. bankruptcy protection since the beginning of June, has been looking for a buyer for Saab since saying in February that it was breaking ties with the division.
Koenigsegg, founded by Christian von Koenigsegg in 1994, makes customized, high-performance sports cars costing as much as $1.2 million. The deal may help Saab, which is also under protection from creditors, gain financial aid from the Swedish government. Swedish Industry Ministry State Secretary Joeran Haegglund said on June 11 that the government is "well prepared" to discuss loan guarantees with Saab's new owner.
Saab said on April 6 that it aims to secure about $1 billion in financing from the European Investment Bank and GM to help achieve positive cash flow by 2011. The carmaker is seeking an agreement with creditors to pay back 25 percent of about 10 billion Swedish kronor ($1.28 billion) owed and will present the outcome of talks to a court June 17.
Wallenberg Asset
GM first invested in Saab in 1990, buying half of the automaker from the Wallenberg family's Investor AB holding company. Saab is separate from Saab AB, the Swedish maker of the Gripen fighter jet and other defense products. In 2000, GM took full control of Saab Automobile, which racked up an operating loss of 16.5 billion kronor in the five years until 2008.
"Saab has now more or less lost its entire loyal customer base," Simon Empson, managing director of U.K. automotive website Broadspeed.com, said before the agreement's announcement. "It's a complete restart."
Saab employs about 4,100 people in Sweden and sold fewer than 100,000 cars last year. Its popularity peaked in the 1980s, when the 900 model drew buyers seeking a European car that stood for technical innovation, safety, luxury and idiosyncratic design. Saab was the first carmaker to introduce side-impact protection systems in 1972 and spearheaded the use of turbo- charged engines.
Under Koenigsegg, Saab will return production of the larger 9-5 model to its main factory in Trollhaettan from Ruesselsheim in Germany, Preuss said.
The carmaker, which had 0.4 percent of the European market last year, lost about 3 billion kronor in 2008 and expects a similar deficit in 2009, according to court documents.
Koenigsegg, based in Aengelholm, in southern Sweden, makes only two models. The CCX costs $1 million and the CCXR, which can run on biofuel, costs $1.2 million. The CCX, which has a top speed of more than 395 kilometers (245 miles) per hour, can accelerate to 200 km/h in 9.8 seconds, according to the company's Web site.
