Swedish state guarantees have been approved by the European Commission (EC) as part of plans by the European Investment Bank (EIB) to lend Saab EUR400m (US$548m).
Today’s (8 February) news allows former GM unit Saab to proceed with its rescue plan by Dutch luxury carmaker Spyker, with eventual production in Sweden and Mexico.
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The EC has ruled 82.8% of the Swedish guarantee to be in line with its state aid rules concerning access to finance in the current global economic uncertainty, with Saab providing an “adequate remuneration and providing sufficient securities” in case the guarantee would be drawn. The remaining 17.2% will be provided on market conditions and does not constitute state aid.
Exact details of those “sufficient securities” have not been revealed, but the EC noted Saab will have to pay a guarantee premium and provide the Swedish government with “high-quality collateral” covering the full amount. For an unspecified part of the guarantee, the EC said a premium of 12.48% per year was the market price for the risk involved in issuing the guarantee.
“The state guarantee will contribute to the implementation of Saab’s business plan without giving rise to any undue distortions of competition,” said competition commissioner Neelie Kroes.
The EC added that according to the business plan, Saab will use the EUR400m for a EUR1bn investment project related among other things, to fuel efficiency and car safety.
“We now welcome the decision made by the European Commission,” a Swedish ministry for enterprise spokeswoman told just-auto.
The new owner will be renamed Saab Spyker Automobiles (Saab Spyker) and will operate Spyker and Saab as two separate operating companies.
