GM to sell Swedish unit Saab
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STOCKHOLM -- Saab Automobile, General Motors Corp.'s struggling Swedish unit known for its family cars, was rescued yesterday by a consortium led by Koenigsegg Automotive AB, a tiny company that produces only a dozen custom-made super cars a year.
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Having penned a memorandum of understanding, GM said the sale would include an expected $600 million funding commitment from the European Investment Bank, guaranteed by the Swedish government. Additional funding for Saab's operations and investments would be provided by GM and the Koenigsegg Group AB consortium, it said.
"This is yet another significant step in the reinvention of GM and its European operations," GM Europe President, Carl-Peter Forster, said in a statement.
A person briefed on the deal said GM will get nothing initially for Saab, but would be paid $150 million -- capital Saab had left over from GM's ownership -- on top of the value of Saab's assets if the new company turns a profit. The person, who did not want to be identified because the deal has not been closed, could not estimate the value of those assets.
GM bought a 50 percent stake in Saab for $600 million in 1990 and acquired the rest for $125 million in 2000. GM CEO Fritz Henderson said GM could build another car for the Saab brand.
"Based on the preliminary plan, we expect the buyer to ask GM to build the 9-4x," Mr. Henderson told reporters during an online chat yesterday. "We will also provide support in terms of powertrain and other technologies."
The company fronting the consortium, Koenigsegg Automotive, was founded in 1994 by Christian von Koenigsegg, a Swedish sports car fanatic and entrepreneur, who remains the chief executive. It makes luxury sports cars at its headquarters, a former air force base near Angelholm, in southern Sweden.
With a full-time staff of 45, Koenigsegg (KOH-nigs-egg) makes around a dozen cars a year, customized for every buyer. The company doesn't advertise prices for its models, but they are believed to range between 8 million and 18 million kronor ($1 million-$2.3 million) each.
Saab, on the other hand, has more than 4,000 staff worldwide, is represented in some 50 countries, and typically produces more than 100,000 cars a year.
First Published June 17, 2009 12:00 am
