Saab may still require aid from Swedish government

Article by Christian Andrei, on August 27, 2010

According to a Swedish minister Saab may still require loan guarantees from the Swedish government in spite of its impending takeover by Koenigsegg.

This is because the government is uncertain at this point in just how much cash Koenigsegg is ready to inject into the struggling carmaker. Saab may also need crucial loans from the European Investment Bank (EIB) to guarantee its future, which the government should ensure.

GM, the parent company of Saab, struck a deal with niche supercar manufacturer Koenigsegg to sell Saab. However, the key element, that is, the amount of money Koenigsegg is willing to put into Saab, has not been disclosed.

Another key point is the ability of Koenigsegg to lead Saab. If it will come out that they will require government loan guarantees in order to avail of EIB credit, then they should approach the government.

Although this might not really be needed, but the government's involvement cannot simply be assumed. However, a spokesperson for the Swedish government said that it would really be better if Koenigsegg invests enough money into Saab to pass up government involvement.

GM has said though that the deal with Koenigsegg, which is supported by US and Norwegian investors, is going to possibly include EIB assistance amounting to 363 million Pounds ($600 million).

Topics: saab, sweden

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