Identifier
Created
Classification
Origin
09STOCKHOLM374
2009-06-23 08:31:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Stockholm
Cable title:
SAAB + KOENIGSEGG = KOENIGSSAAB?
how-toVZCZCXRO6514 PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSL RUEHSR RUEHVK RUEHYG DE RUEHSM #0374 1740831 ZNR UUUUU ZZH P 230831Z JUN 09 FM AMEMBASSY STOCKHOLM TO RUEHC/SECSTATE WASHDC PRIORITY 4431 INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
UNCLAS STOCKHOLM 000374
SENSITIVE
SIPDIS
E.O. 12958:N/A
TAGS: ECON EFIN PGOV SW
SUBJECT: SAAB + KOENIGSEGG = KOENIGSSAAB?
UNCLAS STOCKHOLM 000374
SENSITIVE
SIPDIS
E.O. 12958:N/A
TAGS: ECON EFIN PGOV SW
SUBJECT: SAAB + KOENIGSEGG = KOENIGSSAAB?
1. (U) Summary: On June 16, GM revealed its plans for the future
of Saab Automotive as Koenigsegg Group AB confirmed the details of a
memorandum of understanding for the purchase of Saab. Koenigsegg is
a Swedish sports car maker, producing as few as 18 exclusive cars
per year. Commentators in Sweden have questioned whether Koenigsegg
will have the financial muscle and industrial know-how to run Saab
and the Swedish Government has yet to guarantee any loans from the
European Investment Bank. End Summary.
2. (U) Swedish sports car maker Koenigsegg is to buy Saab
Automobile, it was confirmed on June 16. In a public statement,
"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." In her own public statement welcoming
the deal, Swedish Minister for Enterprise and Energy Maud Olofsson
said, "It is good that Saab's ownership issue is now settled. This
is an announcement that the company's employees, Trollhattan, the
region, and the government have all been waiting for." Saab last
made a profit in 2001, the only year in almost two decades of GM
ownership. 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.
3. (U) The sale is expected to close by the end of the third
quarter and includes an expected $600 million funding commitment
from the European Investment Bank, yet to be guaranteed by the
Swedish government. Saab Automobile owes $1.3 billion to GM as well
as $44 million to the Swedish Government and $82 million to other
creditors. About 3,400 people are employed in Sweden, and some
12,000 other jobs in the country depend on Saab through suppliers.
4. (U) However, Saab's creditors agreed on June 17 to write down
75 percent of the automaker's debts, significantly reducing the
financial burden facing the Koenigsegg Group. The Swedish state
remained among the creditors who refrained from voting in favor of
the deal. The letter of intent between the parties means that the
National Debt Office can now initiate negotiations with Saab and its
future owners on the conditions for state credit guarantees for
loans from the European Investment Bank (EIB). Before a Government
decision can be taken to provide guarantees, the EIB must approve
the framework for the loans and the European Commission must approve
the terms of the state credit guarantees.
5. (U) Koenigsegg was founded in 1994 by Swedish businessman
Christian von Koenigsegg, holds only 45 employees and produces 18
high-end sports cars a year for more than $1.4 million each. Over
the past five years the company has shown in total $8.4 million of
losses. The company is backed by U.S. and Norwegian investors,
among them the financial tycoon Bard Eker, whose holding company
Eker Group holds a 49 percent stake in the niche sports car maker.
Mark Bishop is said to hold 22.2 percent of the shares in newly
registered Koenigsegg Group AB. He is an American previously
involved in subprime loans and most recently involved in a company
acquiring real estate seized by banks. Christian von Koenigsegg
revealed little of his plans in an interview with Swedish public
broadcaster SVT, saying only that he has a long-term ownership plan
and will follow the business plan previously laid out by Saab's
chief executive Jan Ake Jonsson.
6. (SBU) Commentators in Sweden have questioned whether Koenigsegg
will have the financial muscle and industrial know-how to run Saab,
especially since the new owner has yet to detail its plans for the
future. Doubts are also raised about what the GOS will require to
provide the guarantee for the EIB loans. Market insiders have said
that they expect that the GOS will require the new owners to put in
fresh capital equaling the amount the GOS will guarantee, some $600
million - in order for the Government to move ahead with the
guarantee. If not, the GOS will let the deal fall through -- a move
which ultimately could lead to a bankruptcy for SAAB.
SILVERMAN
SENSITIVE
SIPDIS
E.O. 12958:N/A
TAGS: ECON EFIN PGOV SW
SUBJECT: SAAB + KOENIGSEGG = KOENIGSSAAB?
1. (U) Summary: On June 16, GM revealed its plans for the future
of Saab Automotive as Koenigsegg Group AB confirmed the details of a
memorandum of understanding for the purchase of Saab. Koenigsegg is
a Swedish sports car maker, producing as few as 18 exclusive cars
per year. Commentators in Sweden have questioned whether Koenigsegg
will have the financial muscle and industrial know-how to run Saab
and the Swedish Government has yet to guarantee any loans from the
European Investment Bank. End Summary.
2. (U) Swedish sports car maker Koenigsegg is to buy Saab
Automobile, it was confirmed on June 16. In a public statement,
"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." In her own public statement welcoming
the deal, Swedish Minister for Enterprise and Energy Maud Olofsson
said, "It is good that Saab's ownership issue is now settled. This
is an announcement that the company's employees, Trollhattan, the
region, and the government have all been waiting for." Saab last
made a profit in 2001, the only year in almost two decades of GM
ownership. 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.
3. (U) The sale is expected to close by the end of the third
quarter and includes an expected $600 million funding commitment
from the European Investment Bank, yet to be guaranteed by the
Swedish government. Saab Automobile owes $1.3 billion to GM as well
as $44 million to the Swedish Government and $82 million to other
creditors. About 3,400 people are employed in Sweden, and some
12,000 other jobs in the country depend on Saab through suppliers.
4. (U) However, Saab's creditors agreed on June 17 to write down
75 percent of the automaker's debts, significantly reducing the
financial burden facing the Koenigsegg Group. The Swedish state
remained among the creditors who refrained from voting in favor of
the deal. The letter of intent between the parties means that the
National Debt Office can now initiate negotiations with Saab and its
future owners on the conditions for state credit guarantees for
loans from the European Investment Bank (EIB). Before a Government
decision can be taken to provide guarantees, the EIB must approve
the framework for the loans and the European Commission must approve
the terms of the state credit guarantees.
5. (U) Koenigsegg was founded in 1994 by Swedish businessman
Christian von Koenigsegg, holds only 45 employees and produces 18
high-end sports cars a year for more than $1.4 million each. Over
the past five years the company has shown in total $8.4 million of
losses. The company is backed by U.S. and Norwegian investors,
among them the financial tycoon Bard Eker, whose holding company
Eker Group holds a 49 percent stake in the niche sports car maker.
Mark Bishop is said to hold 22.2 percent of the shares in newly
registered Koenigsegg Group AB. He is an American previously
involved in subprime loans and most recently involved in a company
acquiring real estate seized by banks. Christian von Koenigsegg
revealed little of his plans in an interview with Swedish public
broadcaster SVT, saying only that he has a long-term ownership plan
and will follow the business plan previously laid out by Saab's
chief executive Jan Ake Jonsson.
6. (SBU) Commentators in Sweden have questioned whether Koenigsegg
will have the financial muscle and industrial know-how to run Saab,
especially since the new owner has yet to detail its plans for the
future. Doubts are also raised about what the GOS will require to
provide the guarantee for the EIB loans. Market insiders have said
that they expect that the GOS will require the new owners to put in
fresh capital equaling the amount the GOS will guarantee, some $600
million - in order for the Government to move ahead with the
guarantee. If not, the GOS will let the deal fall through -- a move
which ultimately could lead to a bankruptcy for SAAB.
SILVERMAN