Thursday, August 20, 2009
GM completes Saab deal with Koenigsegg
General Motors has finalised an agreement to sell its Saab unit to Koenigsegg Automotive, the Swedish producer of high-performance supercars. The deal, which cements a provisional accord struck in June, will mark another step forward in efforts to restructure GM as the loss-making US carmaker narrows its range of brands.
The memorandum of understanding agreed in June was conditional on $600m of funding from the European Investment Bank, underwritten by Sweden. Recent reports in the Swedish press claimed the consortium behind the bid was showing signs of fracturing but Koenigsegg said the deal was not threatened.
GM is chasing a target to close the sale by the end of the third quarter as part of a broader disposal of loss-making assets. Provisional deals have also been struck to sell its Hummer and Saturn brands. The Saab deal would bring an end to an unsuccessful 19-year relationship between GM and the Swedish carmaker.
GM has never made a profit from the investment and Saab's worldwide sales dipped to just 98,000 cars last year. Privately owned Koenigsegg, founded in 1994 by entrepreneur and car enthusiast Christian von Koenigsegg, makes bespoke cars at a former air base in Sweden that are priced at about ?1m each.
The consortium investing with Koenigsegg includes Norwegian entrepreneur Bard Eker, who owns about half of the Swedish company's shares.
Under the provisional pact signed in June, GM agreed to invest more into Saab after its spin-off than it would receive from the buyers. The Koenigsegg consortium pledged a relatively small sum up front backed by contingent financing, to be repaid to GM if they were to succeed in making Saab viable.
DATED: 20.08.09
FEED: AW
