MercoPress. South Atlantic News Agency

Swedish hand built car maker takes over Saab from ailing GM

The operation however still needs funding from the European Investment Bank

Koenigsegg Automotive, the Swedish maker of luxury 1.2-million US dollars sports cars, agreed to buy Saab Automobile from General Motors by the end of the year, potentially moving the company into the automotive mass market.

Completion of the sale to Koenigsegg and investment partners is tied to Saab getting funding from the European Investment Bank backed by Swedish state guarantees, as well as transitional assistance from Detroit-based GM, the US carmaker said in a statement. The Swedish government said the transaction still requires further talks on terms for aid.

Taking over Saab would catapult Aengelholm, Sweden-based Koenigsegg from its hand-built super-car niche into the volume-car market, adding Saab sedans and station wagons to a line-up of models capable of reaching speeds of close to 400 kilometres an hour. GM said in June that Saab’s sale depends on the division receiving a 600 million loan from the EIB.

“It is good that the ownership question for Saab now gets clearer but there are still several steps left before it is completed,” Swedish industry ministry state secretary Joeran Haegglund said in a separate statement.

“Koenigsegg Group has to provide further private capital, negotiate about loans with the EIB as well as agreeing with the National Debt Office about the terms of potential state credit guarantees”.

Saab with a workforce of 4.100 has been unprofitable for most of the 20 years that GM has owned it, and it sold fewer than 100,000 cars last year. GM bought the Trollhaettan, Sweden-based manufacturer in two stages from Investor AB, the Wallenberg family’s publicly traded holding company, starting in 1990.

GM has been looking for a buyer for Saab since February, when the financially struggling US company said it was breaking ties with the division and the unit was granted protection from creditors.