GM says reaches deal to sell Saab to Koenigsegg

General Motors Europe said on Tuesday a preliminary agreement has been reached to sell the company's loss-making Swedish unit Saab to local sports carmaker Koenigsegg.

Koenigsegg, a small company with just 45 staff that makes only a handful of cars a year, came out of nowhere to emerge as a front-runner to buy Saab.

The deal would see Saab, which was put up for sale earlier this year, emerge from two decades under the umbrella of its U.S. parent which filed for bankruptcy earlier this month.

Sale terms were not disclosed but the agreement includes expected financing to be guaranteed by Sweden.

"The sale, expected to close by the end of the third quarter of this year, includes an expected $600 million funding commitment from the European Investment Bank (EIB) guaranteed by the Swedish government," GM Europe said in a statement on its website.

Saab Automobile had been in talks with two or three bidders in recent weeks.

Saab, whose sales comprised just over 1 percent of GM's total sales volume last year, has been hit hard by the economic downturn that has savaged sales on both sides of the Atlantic.

The company, one of Sweden's best-known brands, has said it needs $1 billion of financing to help it overhaul production and launch new models while absorbing expected losses of about 3 billion Swedish crowns ($382 million) this year.

($1=7.850 Swedish crowns)

[Source: Reuters, Stockholm, 16Jun09]

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