Dagens Industri Reports Saab May Not Get Full EIB Loan

Posted on 30. Sep, 2009 by in 2000-2009

Swedish Newspaper, Dagens Industi reports that Saab may not get the full EIB loan as syndicated on Reuters today.

There are conditions apparently that may not exactly fit the loan lending rules, but this is from an unnamed source, so take this news lightly until we hear otherwise from official channels.

Saab may not get full EIB loan – paper
Tue Sep 29, 2009 5:16pm EDT

* $612 mln loan is key to Koenigsegg acquisition plans

* Questions whether some projects fit EIB lending rules

* Concerns remain over Koenigsegg’s ability to buy Saab

STOCKHOLM, Sept 29 (Reuters) – Ailing Swedish car firm Saab, being sold by General Motors [GM.UL], may not get the full 4.3 billion Swedish crown ($612 million) loan it has asked for from the European Investment Bank (EIB), daily Dagens Industri wrote on Tuesday, quoting an unnamed source.

The loan is key to plans by luxury car maker Koenigsegg to buy Saab, but the EIB is doubtful whether some of the group’s projects to develop environmentally friendly technology are within its remit for lending.

The EIB could lend Saab much less than the car maker wants, the paper wrote.

“There are questions about whether a number of development projects fit with the EIB’s rules for lending,” the paper quoted a source with insight into the process saying.

Koenigsegg, backed by U.S. and Norwegian investors, struck a preliminary acquisition deal earlier this year, but concerns have continued to surface over whether it had the financial muscle to buy and run Saab.

Koenigsegg is in talks with Sweden to secure state guarantees for the EIB loans.

But Dagens Industri said that questions had also been raised regarding the value of collateral that would be placed with Sweden’s Debt Office to secure a guarantee from the
government.

“There is a discussion as to whether Saab’s assets shouldn’t be valued at their worth in the event of insolvency rather at market value,” the source said.

“In that case, the collateral would not be enough security for a loan of 4.3 billion crowns.”

Koenigsegg Chief Executive and part owner Christian von Koenigsegg told Reuters on Saturday there was good progress in talks to secure the guarantees and the group aimed to finalise Saab’s acquisition by the end of October. [ID:nLQ720794]

He played down a report that Koenigsegg could pull out of the deal unless there was progress on securing loans by Wednesday.

This month, Koenigsegg said state-run Beijing Automotive Industry Holdings would take a minority stake in the luxury carmaker as part of its planned purchase, easing funding
worries.

Swedish state secretary Joran Hagglund told Reuters on Tuesday he hoped the EIB would decide on the loan on Oct. 21 or the day after.

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