Spyker CEO Says EIB Loan Is Biggest Saab Deal Hurdle
By Ola Kinnander
(Bloomberg) — Spyker Cars NV's plan to buy General Motors Co.'s Saab unit hinges on the European Investment Bank approving a loan before the end of December, the Dutch luxury-car maker's chief executive officer said.
GM and Spyker are not the "potential problem for this transaction," Victor Muller said in a phone interview from his home in Amsterdam today, adding that winning EIB support before year-end is the biggest obstacle. So far, the European Union's lending arm has sent "neutral signals" on approving the 400 million-euro ($574 million) loan that is key to the sale and which the Swedish government must guarantee, said Muller.
"It's mainly now down to the government agencies," Muller said. "That's really the main issue. We're getting lots of support from the Swedish government."
Spyker, the maker of $235,000 sports cars, emerged as the frontrunner to buy Saab this month after Koenigsegg Group abandoned its bid on Nov. 24. GM Chief Executive Officer Ed Whitacre said on Dec. 15 that the Detroit-based carmaker will shut the unit if it doesn't reach a deal with Spyker by the end of this month. GM has agreed to sell technology from Saab's 9-3 and 9-5 models to Beijing Automotive Industry Holding Co.
Koenigsegg Canceled Acquisition
Koenigsegg Group canceled its planned acquisition of Saab, saying it ran out of time because delays in closing the acquisition had "resulted in risks and uncertainties" that prevented it from implementing a new business plan for the Swedish carmaker. The EIB in August delayed a decision on whether to give Saab a loan, which it eventually granted the Trollhaettan, Sweden-based company on Oct. 21.
While the EIB approved the loan to Saab, the bank must now re-evaluate the financing with Spyker as the new owner. The Dutch carmaker is using Koenigsegg's business plan in its bid and intends to keep Saab's management if it buys Saab, Muller said.
"In October, the EIB approved the Koenigsegg deal, which was exactly the same deal — the same lender, same borrower and the same business plan," Muller said. "The only thing changed is the shareholder, so they have to do due diligence on that."
EIB Vice President Eva Srejber said that since "this is a change of ownership" then "of course we need to analyze."
The EIB is in contact with Saab, Spyker, GM and its adviser Deutsche Bank AG and is "working in close cooperation" with Swedish authorities, she said. She declined to comment on whether a decision would be made before the end of the year.
Profitable by 2012
Saab was to become profitable by 2012 with annual sales of at least 100,000 cars, according to Koenigsegg Group's business plan in September.
Owning Saab would give Spyker access to a network of 1,100 dealers worldwide, Muller said. Spyker currently has 30 dealers. Spyker would also tap into Saab's engineering resources and supplier network, which could cut costs for some parts the Dutch company uses in its cars, he said.
From Saab's perspective, one advantage of having Spyker as owner would be to promote the Swedish company's "independent" nature, Muller said. "That's what's there to be gained for Saab — entrepreneurs at the board level," he said.
Zeewolde, Netherlands-based Spyker shares fell 1 cent, or 0.5 percent to 2.19 euros in Amsterdam trading. The stock has gained 40 percent since the super-car maker was first reported to be interested in Saab.
No deal will be signed with GM until the EIB has decided on whether Saab can get the loan, Muller said. Spyker is also waiting for the European Commission to decide whether potential Swedish loan guarantees for the EIB funding distorts competition and for the Swedish state to decide whether it will give Saab the guarantees.
"There is very little point in signing an agreement until the time that the governmental agencies have approved the transaction," Muller said. "Everybody knows exactly what the deadline is. There is no misunderstanding about that," he said, adding GM's CEO had been "blatantly clear" about a Dec. 31 deadline.
Saab is likely to win European Commission approval for the EIB loan, Johnny Kjellstroem, who is negotiating the case with the European Union's regulatory arm on behalf of the Swedish government, said last week. It's possible that the European Commission will reach a decision this month, he said.
The EIB supports projects throughout the European Union and borrows funds in the capital markets it then lends on to companies under favorable terms, according to its Web site.
To contact the reporter on this story: Ola Kinnander in Stockholm at firstname.lastname@example.org.