“Today’s announcement is great news for Saab employees, dealers, and suppliers, great news for millions of Saab customers and fans worldwide, and great news for GM,” said GM Vice President for Corporate Planning John Smith, who was the first to break the news in a press release on Tuesday afternoon.
The closed-door negotiations in Stockholm, which intensified during the past week, have led to wide media speculation, generating alternating waves of hope and despair for thousands of Swedes whose jobs are dependent on the survival of Saab.
Earlier negotiations failed, specifically, because the issue of financing the deal, as well as the operations of Saab after an eventual sale was not satisfactorily resolved. Although Spyker could finance the acquisition, there were unresolved uncertainties about its business plan.
The future operation of Saab is dependent on a loan of about $560 million from the European Investment Bank (EIB), an affiliate of the European Union that offers loans on favorable terms for environmentally friendly industrial projects. But EIB requires adequate security—such as government guarantees—that the Swedish government has, until now, refused to provide.
“The government has decided to grant guarantee for the loan to Saab,” said Maud Olofsson, the Swedish minister of Enterprise at a press conference in Stockholm on Tuesday shortly after GM’s confirmation of the agreement.
“The government has done its job. Now, it’s the company and the employees turn to take over,” said Olofsson.
Details of Spyker’s business plan for Saab has not been made public but the Swedish government sets high priority on saving jobs when deciding to grant a guarantee for an EIB loan.
Olofsson told reporters that the government will safeguard employment and is ready to use the instruments available to save Saab.
Soon after the press conference in Stockholm, Spyker released some details of the agreement.
Spyker acquires Saab from GM for $74 million. The deal is dependent on the approval of a $560 million loan to Saab from EIB, guaranteed by the Swedish government. GM will retain preference shares of $326 million representing less that 1 percent of the votes of the new company, Saab Spyker Automobiles. To finance the deal, Spyker has a complex financial arrangement with GEM Global Yield Fund Limited, an international investment company, and other investors.
Spyker is a manufacturer of exclusive sports cars, with a yearly production of close to 100 cars. Spyker’s shares have been subjected to raging speculation during the last two days and trading was stopped late on Tuesday.
