Sweden ready to help Saab, with some conditions

Article by Christian Andrei, on April 15, 2011

Saab has been given a helping hand by Sweden, which had offered conditional backing for an agreement to free up cash. Last year, Spyker saved Saab but it faced a drop in 2010 sales, resulting to a cash-crunch in 2011. Saab was forced to suspend production since two weeks ago as it had failed to make payments to suppliers.

In a news conference, Enterprise Minister Maud Olofsson said that the Debt Office has been allowed to conclude an agreement with Saab.

The government approved a proposal from the Debt Office to let Saab sell real estate, including the production plant, to Russian financier Vladimir Antonov and then lease it back. Initially, this deal will bring 30 million euros to Saab; however, the value of the real estate is actually a lot higher.

Sweden was compelled to agree to the deal since the real estate was held as collateral for a 400 million euro loan from the European Investment Bank (EIB) to Saab, which was guaranteed by the Debt Office.

Olofsson explained that the deal to release the collateral meant that the EIB loan would drop to 280 million euros. She added that in practice, this means that the exposure of taxpayers goes down along with the size of the loan.

The government had set conditions, including that Saab has to get a market price for the property. It also has to get access to the production facilities and to make sure that questions swirling around the buyer, Antonov, would be resolved.

Topics: sweden, saab

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