But European Commission still needs to approve the £358m loan
6 October 2009

The Swedish Government has agreed to underwrite the 4 billion Kronor (£358m) loan that Saab is seeking from the European Investment Bank (EIB).

The move marks a vital stage in the attempt by the Koenigsegg Group to buy the ailing carmaker from General Motors.

However the next hurdle is convincing the European Commission to allow the loan to go ahead. The rules around EIB loans say that they can only be given to ‘viable businesses’.

An independent report from a Swedish expert describes Saab’s future business plan as ‘viable but risky’.

The plan will see the 9-5 and 9-5 estate launched next year and built alongside the 9-3 saloon, estate and cabrio at Saab’s Trollhatten facility. Saab will also buy the 9-4X SUV as a finished vehicle from one of GM’s Mexican factories.

However the Koenigsegg Group and Saab bosses say the plan allows Saab to be profitable even with sales of 100,000 units per year, a figure generally regarded to be a worst-case scenario once the new models are launched.

It will now be a race to complete the buy-out and it could take two months for the European Commission and EIB to rubber stamp the loan and GM wants to complete the sale of Saab by the end of this year.

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Comments
3

7 October 2009

I've probably got my sums all wrong here but are they saying that if they sell 100,000 cars for at a tad over £3500 each, the company will be in profit?

Sounds like the accountants have been drinking Krona rather than using it on their balance sheets.

7 October 2009

No it doesn't mean that at all. The SEK 4.4Bn loan that has been granted by the EIB and guaranteed by the Swedish government is only a small but crucial part of the full investment that the Koenigsegg Group needs to funding the venture. The loan itself can only be used on future projects that will make the companies vehicles more environmentally responsible. In SAAB language that means a goal of 150hp or better put 110kw per Litre engine capacity. SAAB has just under 4000 employees at present making them a very 'lean' company with relatively low overheads, making a break-even point of just 100,000 units possible

16 December 2016
I don't think that producing more cars is really going to help car manufacturers unless the demand for their vehicles are there. While people all want to buy cars, there are so many conflicting issues these days - the electric options and all the consequences of using vehicles in the dying environmental situation we're in... Even with great financing, something fundamental about the industry has to change if we want to see the outlook get better...

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