Saab got a new life Tuesday as General Motors Co. agreed to sell the Swedish car brand to the small Dutch luxury carmaker Spyker Cars NV.
Under the deal, GM will get $74 million in cash plus $326 million worth of preferred shares in Saab. GM will get "other considerations," which it did not specify.
The Swedish government is also ready to guarantee a loan of up to $550 million from the European Investment Bank, Industry Minister Maud Olofsson said.
The deal is a coup for Spyker and a lifeline for Saab, which has lost money for years under GM's ownership and was slated for liquidation.
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In Wichita, it also was welcome news at Euro-Tech Saab, 1122 E. Central, where owner Ron Fortune had been planning his dealership's future without the brand.
"No matter what happens to the dealer body in the U.S., it's good that Saab will be around," Fortune said Tuesday.
He had not yet heard what a new owner for Saab will mean to dealerships such as his, which employs eight people.
"I'm assuming they have a business plan they've given to the government and GM on how they will make this function," Fortune said. "It's a matter of disseminating the information to us."
Saab has around 3,500 employees in Sweden.
The deal also represents a huge challenge for Spyker, which sold only 23 cars in the first half of 2009, its most recent reporting period, and posted a net loss of 8.7 million euros. The 11-year-old company has yet to make a profit, but it says funding for its operations have been guaranteed through 2010.
Under the deal, GM will continue to provide engines and transmissions for the new company for "an extended period of time," and it will keep making the 9-4X crossover vehicle for Saab, said John Smith, GM's vice president of planning and alliances.
GM hopes to close the deal by mid-February, Smith said.
Spyker will continue to provide vehicles for and support Saab's U.S. dealers, Smith said. The Dutch automaker also will guarantee up to $10 million in Saab's obligations to GMAC, which is GM's financing arm.
Sweden's Olofsson said the government made the decision to back the loan on Tuesday after analyzing a review of Spyker's business plan and financial situation by the Swedish National Debt Office and consulting firm KPMG. She said the money must be used for projects to develop environmentally friendly cars in Sweden.
If the European Investment Bank loan is approved it will be paid out in installments, not as a lump sum, she said.
But she said the biggest challenge remains for Saab: to develop cars that customers want and "deliver a solid profit."