EU COMMISSION APPROVES EIB LOAN

Posted on 08. Feb, 2010 by in 2010-2019

As the Swedish Government and the Swedish National Debt office have approved the EIB loan, yet another critical milestone has been approved.

Today, the EU Commission have also approved the EIB loan. This now leaves the final step in this long awaited process up to the EIB themselves to approve the loan this week.

Here’s the official press release by the EU Commission as well as Sweden’s Dagens Industri,

State aid: Commission approves Swedish State guarantee for Saab

The European Commission has authorised, under EU state aid rules, plans notified by Sweden to provide a guarantee that would enable Saab Automobile AB to access a loan from the European Investment Bank (EIB). The Commission found that 82.8% of the guarantee to be provided by Sweden was in line with its Temporary Framework for state aid measures, which gives Member States additional scope to facilitate access to financing in the present economic and financial crisis (see IP/08/1993 ). In particular, Saab will pay an adequate remuneration for the guarantee and provide sufficient securities in case the guarantee would be drawn. It is therefore compatible with Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU), which permits aid to remedy a serious disturbance in the economy of a Member State. The remaining 17.2% will be provided on market conditions and therefore does not constitute state aid.

Competition Commissioner Neelie Kroes said: “The state guarantee will contribute to the implementation of Saab’s business plan without giving rise to any undue distortions of competition.”

The loan to be granted by the EIB would co-finance Saab’s business plan in the light of its sale by current owner General Motors to Dutch carmaker Spyker Cars N.V. According to the business plan, Saab intends to use the EIB loan of €400 million for an investment project worth €1 billion related to inter alia fuel efficiency and car safety.

Saab would pay a premium for the guarantee and provide the Swedish Government with high-quality collateral covering the full guaranteed amount. This collateral could be called upon by the Swedish state if it had to pay out any money under the guarantee. The level of the premiums paid during the lifetime of the loan would be in line with the provisions of the Commission’s Temporary Framework. For a part of the guarantee, the Commission found that, in the current market situation and taking into account the other conditions of the transaction, a premium of 12.48 % per annum constitutes the market price for the risk involved in issuing such a guarantee. The Commission therefore concluded that this part of the guarantee did not involve state aid.

The non-confidential version of the decision will be made available under the case number N 541/2009 in the State Aid Register on the DG Competition website. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News .


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EU approves state guarantee for loans Saab

Updated 2010-02-08 12:05
EU Commission on Monday approved the Swedish government plans to put out a guarantee that Saab Automobile to take a loan from the European Investment Bank for 400 million euros.
“The State guarantee will help Saab to implement its business plan without incurring any undue distortion of competition”, said Competition Commissioner Neelie Kroes said in a statement.

A smaller proportion, 17.2 percent, are 82.8 per cent, satisfying the requirements of the EU’s temporary framework for state aid measures, EU countries to facilitate the financing during the current crisis.

The consideration for the guarantee that Saab will pay is sufficient. So is the security that it provides for the eventuality that the guarantee.

The EIB loan will co-finance the Saab’s business plan at General Motors sales to Dutch Spyker. The loan will be used for an investment of 1 billion euros, including for fuel efficiency and automotive safety.

It is planned to Saab to pay a fee for the guarantee and provide a guarantee of high quality to the Swedish government, which covers the entire amount guaranteed.

Swedish State can redeem the security on the forced payment of guarantee money.

The level of fees paid during the term of the loan complies with the Commission’s provisional framework.
For part of the guarantee, the lower portion of 17.2 percent, the Commission found that the annual fee of 12.48 per cent with the market given the current risks of the transaction and other conditions.

The Commission’s conclusion was therefore that this part of the guarantee did not involve any state aid.

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