Koenigsegg Purchase of Saab Confirmed

Saab Automobile is to be sold to Swedish sports car maker Koenigsegg.

US automaker General Motors has signed a tentative agreement with Koenigsegg to sell its beleaguered unit, GM said in a statement on Tuesday.

"General Motors Corp. and Koenigsegg Group AB, a consortium led by Koenigsegg Automotive AB, today confirmed the details of a memorandum of understanding for the purchase of Saab Automobile AB that secures Saab's future," GM said.

Koenigsegg, founded in 1994 by Swedish businessman Christian von Koenigsegg, has just 45 employees and produces 18 high-end sports cars a year for more than a €1 million ($1.4 million) each.

"Koenigseggs Group's unique combination of innovation, entrepreneurial spirit and financial strength, combined with Koenigsegg's proven ability to create world-class Swedish performance cars in a highly efficient manner, made it the right choice for Saab as well as General Motors," GM Europe President Carl-Peter Forster said in a statement.

The sale, which is expected to close by the end of the third quarter, includes an expected 600 million dollar funding commitment from the European Investment Bank, guaranteed by the Swedish government.

"Additional support is to be provided by GM and Koenigsegg Group to fund Saab's operations and product programme investments," GM said.

The Saab automaker sold 93,000 cars worldwide in 2008.
It owes $1.3 billion to GM -- its largest individual creditor.
The car unit posted a 2008 net loss of $241 million, as sales dwindled due to an ageing product line and a collapse in demand as credit lines tightened.

It last made a profit in 2001, the only year it was in the black in almost two decades of GM ownership.