Sweden’s Guarantee of Saab EIB Loan Wins EU Approval (Update3)
February 08, 2010, 4:09 PM EST(Adds new loan arranged by Spyker from fifth 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 working on the Saab case. “I’m optimistic this will be resolved in the end.”
Spyker said today that it has arranged further financing for the Saab purchase, entering a $25 million convertible two- year loan agreement with an investment company owned by Heerema Holding Company Inc., contingent on the receipt of the EIB sum.
The Dutch company paid an initial $25 million to GM on Jan. 26 and is confident that it will secure funding for a final payment of $24 million due on July 15, it said in a statement.
Dealer Backing
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.
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.
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.
Spyker Chief Executive Officer Victor Muller, spokesman Mike Stainton and EIB Vice President Eva Srejber couldn’t immediately be reached for comment.
--Editors: Tom Lavell, Chris Jasper.
To contact the reporters on this story: Ben Moshinsky in Brussels at bmoshinsky@bloomberg.net; Ola Kinnander in Stockholm at okinnander@bloomberg.net.
To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net.
