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GM Signs Binding Deal To Sell Saab Auto To Koenigsegg -Sources
Aug 17, 2009 21:02:10 (ET)
General Motors Co. (GM) has reached a binding agreement to sell its loss-making Saab Automobile AB unit to Swedish sports car maker Koenigsegg Group AB, though people familiar with the situation said a number of funding hurdles still need to be crossed.
The move, expected to be announced early Tuesday, comes two months after the companies signed a letter of intent, and will give Koenigsegg rights to produce the next generation of Saabs for free.
A deal would tie up another loose end in GM's global restructuring as it nears the sale of a majority stake in its core Opel and Vauxhall European assets.
While the purchase price is effectively zero, a disposal of Saab hinges on the Swedish government providing guarantees for loans from the European Investment bank, according to one person familiar with the deal. "The reality is the deal needs to clear a few more hurdles," said the person.
Saab sought protection from creditors in February amid GM's efforts to sell or spin off the unit. The U.S. company had hoped to complete a transaction in June, but is now targeting a September closing. Saab is one of four brands - alongside Hummer, Pontiac and Saturn - being sold or wound down by GM.
Saab's creditors in June approved the auto maker's proposal to pay 25% of about 10.5 billion Swedish kronor ($1.46 billion) in debts, including almost SEK10 billion owed to parent GM, and the rest to auto suppliers and the Swedish government.
GM and Saab declined to comment on the sale agreement, though Swedish media reports said it included a pact on the transfer of technology and services between Saab's new owners and GM. Koenigsegg officials could not be reached.
Dagens Nyheter, a Swedish newspaper, said the deal's terms would also see GM write off the money it used to support Saab earlier this year, and machinery and production equipment will be transferred to the new owners.
Saab last year sold fewer than 94,000 cars, down from about 125,000 vehicles in 2007. Its best-ever year was in 2006, when it sold 133,000 cars, making it a tiny player in the global auto industry.
-By Ian Edmondson and Sharon Terlep
Stockholm Bureau, Dow Jones Newswires; +46 8 545 130 90;
(END) Dow Jones Newswires
August 17, 2009 20:57 ET (00:57 GMT)
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