Saab Automobile To Receive European Bank Loan?

Posted on 09. Jan, 2009 by in 2000-2009

Saab Automobile AB has already received the ability to apply for the $3.14 billion dollar loan that the Swedish Government has indicated back on December 11th, 2008.

According to Ola Kinnander at Dow Jones in Sweden, Saab Automobile AB is going to be possibly receiving another loan from the European Investment Bank. The European Investment Bank has a current list of recipients for loans, so this will be a good place to keep checking for the details of this loan, should it come to fruition for Saab Automobile’s sake. At this time, Saab is not yet listed.

Hagglund, a representative of the the state ministry indicated that he along with many members of the Swedish Government will be in Detroit during the Auto Show to meet with executives of General Motors to discuss the future of the Saab Automobile brand as well as the other Swedish brand and their owner.

This news dialog about Saab Automobile’s future is getting pretty substantial with a lot at stake. Wouldn’t it be nice to be present at that meeting with heads of the Swedish Government, Saab Automobile Sweden & General Motors next week. That would be some interesting dialog to say the least.

By Ola Kinnander


STOCKHOLM -(Dow Jones)- Ford Motor Co. Swedish unit Volvo Cars is seeking a loan with the European Investment Bank, backed by Sweden’s government, and is likely to get the funds approved by March, a senior Swedish government official told Dow Jones Newswires.

Saab Automobile AB, a unit of General Motors Corp. (GM), is also discussing a potential EIB loan with the Swedish government, though it’s further behind in the process, the official said in an interview.

Volvo Cars “has submitted a preliminary application and we’re working with them and with EIB on that,” said Joran Hagglund, a state secretary at the ministry of enterprise who is leading the government’s discussions with the Swedish auto industry.

Volvo Cars, the government and the EIB are now discussing specifics such as exactly what kind of projects the money will finance and how the government guarantee should be shaped, he said. Broadly, the loans would be to help Volvo Cars develop more environmentally friendly vehicles.

“It looks right now like everything may be ready by the beginning of March,” he said.

Volvo Cars spokeswoman Maria Bohlin said: “We are discussing the forms and processes regarding potential loans from the EIB.” She declined to discuss details, including the potential size of the loan.

Hagglund said the deal with EIB may involve several loans over two, three or four years. He said it remains uncertain how much money Volvo Cars may borrow, but confirmed the total amount would exceed 1 billion Swedish kronor ($127 million).

Saab Automobile may be a candidate for an EIB loan later in the year. Sweden’s government has “had a number of discussions with GM since before Christmas” about that possibility, Hagglund said.

The loans would be enabled under Sweden’s SEK28 billion aid package to the country’s struggling auto industry which it unveiled last month. The package comprises SEK20 billion in credit guarantees, aimed at enabling low-interest EIB loans; SEK5 billion in emergency loans primarily to auto suppliers; and SEK3 billion in research and development.

Volvo Cars and Saab Automobile, like much of the auto industry, have been hit by lagging sales, and their struggling U.S. owners have indicated they may sell their respective Swedish units.

The EIB, a unit of the European Union, has said it will make EUR4 billion available this year for environmentally friendly transportation projects, such as the development of more fuel-efficient engines, and another EUR4 billion next year.

EIB adviser Mats Gunnarsson said the demand for EIB loans from Europe’s auto companies “is much bigger” than this year’s limit. The EIB may decide to raise the ceiling, he said.

Hagglund next week will visit the auto show in Detroit. There he will meet with the leadership of GM and Ford, the Swedish government said in a press release Friday.

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