Koenigsegg Automotive, the high-performance sports car maker, is locked in a standoff with the Swedish government over additional funds needed to complete its takeover of Saab.
General Motors announced on Tuesday that it had reached a firm agreement to sell the Swedish carmaker to Koenigsegg as part of efforts to narrow its range of brands and shed loss-making units.
But Christian von Koenigsegg, founder and chief executive of the niche manufacturer, warned that his consortium had raised only 70 per cent of the financing needed to secure Saab’s future and called for the Swedish government to help fill the shortfall.
“It is important that the government meets its responsibilities,” he told the Financial Times. “We’re putting a lot into this and so is GM. We’re asking for a bit more of [the government’s] support.”
His plea met with a cool response from Sweden’s ministry of enterprise, which said the onus was on Koenigsegg to plug the gap. “We’ve been extremely clear about what kind of measures we are willing to offer,” said Frank Nilsson, spokesman. “They need to show that they can come up with more private capital.”
Doubts over funding cast a shadow over what was supposed to mark an important step forward in GM’s restructuring efforts as it pushes for completion of provisional deals to sell its Saab, Saturn and Hummer businesses.
Tuesday’s agreement cemented a memorandum of understanding signed by GM and Koenigsegg in June and both sides said they were confident of closing the deal by the end of this year. But the takeover is conditional on a loan of €400m-€500m from the EU-backed European Investment Bank, guaranteed by the Swedish government.
Swedish officials have indicated they are prepared to provide such a guarantee, provided it can be done without violating EU rules governing state support. But Mr Nilsson said there was little appetite within the centre-right government to offer additional aid.
People close to negotiations indicated that about €300m ($424m) or more was needed on top of the EIB loan.
Mr Koenigsegg said current market conditions would make it difficult to raise capital commercially and called for a “tri-partite solution” in which his consortium, GM and the Swedish government each contributed.
Financial details of Tuesday’s deal were not disclosed but GM said it would continue to share technology and services with Saab after the disposal.
The sale, if completed, would mark the end of a troubled 19-year relationship between GM and Saab, during which time the Swedish carmaker never produced a profit.
Mr Koenigsegg said he was confident of turning Saab around and insisted his business plan would allow the carmaker to break even if it only matched last year’s worldwide sales of 98,000 vehicles.
Privately owned Koenigsegg, founded in 1994, makes bespoke “supercars” at a former air base in Sweden that are priced at about €1m each.
The consortium backing the Saab bid includes Norwegian entrepreneur Bard Eker, who owns about half of Koenigsegg.
The deal comes as talks continue between Ford and a number of potential bidders for Volvo, Sweden’s other global car brand.
The Swedish government has so far avoided the large scale aid that some other governments have offered domestic carmakers and it is acutely aware that any support for Saab would set a precedent for a future Volvo deal.