Bidder for Swedish carmaker Saab pulls out (Roundup)

Nov 24, 2009, 16:58 GMT

Stockholm - The sale of Swedish carmaker Saab was halted Tuesday after the potential buyer said it had pulled out of talks, casting the future of the loss-making group into doubt.

Jan Ake Jonsson, Saab chief executive, told Swedish radio news that 'everyone involved, including myself, are very disappointed.'

'The negotiations will be immediately suspended,' Jonsson added, declining to speculate what would happen with Saab.

Saab's current owner, US group General Motors (GM), confirmed the announcement by the Koenigsegg Group AB - which had previously expressed an interest in buying the firm.

'We're obviously very disappointed with the decision to pull out of the Saab purchase,' GM Chief Executive Officer Fritz Henderson said in a statement.

'Given the sudden change in direction, we will take the next several days to assess the situation and will advise on the next steps next week,' he added.

A GM spokesman told Swedish radio news that the US group had not been in talks with any other buyer than Koenigsegg.

GM earlier this year said it planned to shed the Swedish subsidiary, as part of a selloff that was originally to include German subsidiary Opel too.

GM earlier filed for bankruptcy protection for a six-month period.

During that period a consortium structured around the Koenigsegg Group, a low-volume Swedish sportscar maker launched into talks to buy Saab.

'We regret that after six months of intense and focused work we have reached the painful and difficult decision that we will not be able to go ahead with the purchase,' Christian von Koenigsegg, chief executive of the Koenigsegg Group, said in a statement.

The complex negotiations appeared to have drained the Koenigsegg Group. In addition to GM and Saab management, it also was in talks with the Swedish government.

Part of the deal hinged on a 600-million-dollar loan from the European Investment Bank (EIB). The EIB board granted the loan in October that also needs approval from the Swedish government - which has to guarantee the loan - as well as get a nod from the executive European Commission.

The European Commission has to investigate that the loan guarantee does not violate rules on state subsidies.

The consortium in September announced plans to include Beijing Automotive Industry Holdings (BAIC) as a minority owner.

GM's interest in Saab - one of Europe's smallest carmakers - dates back to the early 1990s. The company took full control in 2000.