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EU clears Swedish state guarantee for Saab

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EU clears Swedish state guarantee for Saab

Automotive News Europe -- February 8, 2010 12:01 CET

BRUSSELS (Reuters) – Saab won EU regulatory approval on Monday for a state guarantee of a 400 million euros ($546 million) European Investment Bank loan, which is key to the carmaker's sale to Spyker Cars.

Tiny, money-losing luxury carmaker Spyker clinched a $400 million deal to buy Saab from General Motors Co. last month and estimated it would need about $1 billion for Saab to develop three or four new models. Part of these costs will come from the EIB loan.

The European Commission said about four-fifths of the guarantee was subject to rules allowing European Union countries to facilitate access to financing by crisis-hit companies.

"The state guarantee will contribute to the implementation of Saab's business plan without giving rise to any undue distortions of competition," Competition Commissioner Neelie Kroes said in a statement.

The Commission said the remaining 17.2 percent was not considered to be state aid, and therefore not subject to EU scrutiny, as it would be provided on market conditions.

Read more: http://www.autonews.com/article/20100208/ANE/302089912/1265#ixzz0exYQGtzN

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Sweden’s Guarantee of Saab EIB Loan Wins EU Approval (Update2)

February 08, 2010, 10:06 AM EST

MORE FROM BUSINESSWEEK

(Adds comment from head of GM’s Swedish dealer network starting in seventh paragraph.)

By Ben Moshinsky and Ola Kinnander

Feb. 8 (Bloomberg) -- Sweden’s guarantee of a European Investment Bank loan to Saab Automobile won European Commission approval, clearing a regulatory hurdle for Spyker Cars NV’s purchase of the carmaker from General Motors Co.

The government guarantee of Saab’s proposed 400 million- euro ($547 million) loan for developing technology won’t cause “any undue distortions of competition,” Neelie Kroes, the European Union’s competition commissioner, said today in a statement. Saab is offering “adequate remuneration” and collateral for the guarantee to meet aid rules, the EU said.

Spyker, the Dutch maker of the C8 Aileron sports car, agreed on Jan. 26 to buy Trollhaettan, Sweden-based Saab for $74 million in cash and $326 million in preferred shares in the new company, to be called Saab Spyker Automobiles. The EIB and Sweden’s National Debt Office must give final loan approvals.

“This should make it easier for the EIB to approve the loan,” said Johnny Kjellstroem, a deputy director at Sweden’s Ministry of Enterprise, Energy and Communications who is working on the Saab case. “I’m optimistic this will be resolved in the end.”

Saab, which is among four brands that GM is casting off after exiting bankruptcy in July, was unprofitable for most of the two decades the Detroit-based carmaker owned it. Spyker said on Feb. 2 that it’s aiming for Saab to return to profit by 2012, with the business plan requiring about $1 billion “in peak funding,” including the lending from the Luxembourg-based EIB.

Likely Approval

Erik Sjulander, the National Debt Office official handling the state-guarantee application, said he hasn’t received any information that the loan won’t receive approval.

Of the $74 million in cash that Spyker is paying GM, $25 million is already in escrow for a $50 million payment to be made upon closing. The final $24 million would be paid by July 15. Peter Hallberg, head of GM’s dealer network in Sweden, said that if Spyker needs money for the final installment, his group would approach a bank to raise the funds.

The dealers made that decision last week “to end speculation” in the Swedish media that Spyker may not be able to raise all the money, Hallberg said in a phone interview today. “But we have not been in touch with Spyker about this, and we see it as extremely unlikely that we will be involved in the financing,” he said.

Spyker Chief Executive Officer Victor Muller, spokesman Mike Stainton and EIB Vice President Eva Srejber couldn’t immediately be reached for comment.

link:http://www.businessweek.com/news/2010-02-08/eu-approves-swedish-guarantee-of-eib-loan-for-saab-automobile.html

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