European Investment Bank Tells Saab History That Koenigsegg-Saab loan Won’t Be Reviewed Until October

Posted on 25. Aug, 2009 by Ryan in 2000-2009

The European Investment Bank has recently indicated to Saab History what the media has been speculating recently, that the loan application for Saab Automobile & Koenigsegg, will not be reviewed by September 30th, but by sometime in late October.

Secondly, it has also been indicated by the EIB below that the EU-Commission needs the Swedish Government to act as a guarantor of this loan so that the commission can approve this loan for the EIB, then the loan process can continue, and not until this takes place first. (ie. Swedish Government -> EU Commission -> European Investment Bank=Loan Approval)

This effectively means that the financial support for the sale of Saab Automobile will not take place until the Swedish Government gives the EU commission the ability to approve the project, and finally the EIB ultimately approves the loan in the end. This entire process appears that it will take up a good part of September and October, perhaps even a little after. Saab has until the end of December of this year until Government Motors ends their financial support for the company.

I hope this sets the record straight as to when the financing will be “complete”.

Subject: Questions on Koenigsegg-SAAB Automobile EIB loans

Dear Sir,

The current status of the SAAB loan application with the European Investment Bank (EIB) is that the most likely scenario is that it will be presented to the bank’s board in October.

When the bank had received all the relevant project related economic financial information from the new owners concerning the SAAB project the EIB staff were able initiate a formal due diligence to discuss together with the borrower to verify and stress test the lenders’ business plan in order to be sure that the loan can be repaid.

When the bank starts to formally analyse a project a letter is sent from the EIB to the EU Commission requesting a non-objection from the EU-Commission to the project as this is needed in order to be sure that the loan is in line with EU objectives. The Commission needs to respond to the bank within 2 months and the board cannot approve a project until there is an “inter-services agreement” on a non-objection from the Commission.

After having analysed a project, the EIB staff submits reports covering the loan application to the management committee in order for this to decide if the loan application should later be presented to the board. These reports are distributed one week ahead of the management committee meeting which takes place four weeks in advance of each board meeting. This means an internal process of 4-5 weeks after the due diligence is finished.

An EIB loan to SAAB will most likely require securities, such as a swedish state guarantee for the EIB loan.

The process to get Commission approval for state guarantees for loans needs to be initiated between the Swedish government and the EU Commission and this process needs to be more or less completed before the EIB can approve the loan.

Tags: bank, EU Commission, European Union, Government Motors, Investment Bank Tells, Swedish Government