Koenigsegg pulls out of deal to buy GM unit Saab
STOCKHOLM (Reuters) - Tiny Swedish luxury carmaker Koenigsegg has pulled out of talks to buy Saab Automobile, putting in doubt the future of General Motors' loss-making unit.
Saab, which has made cars in Trollhattan, southwest Sweden, since 1949, employs 3,400 people, while thousands more jobs at the company's suppliers depend on its business.
Augie Fabela, the chairman of Koenigsegg Group, told Reuters the decision to pull out had been painful.
"Unfortunately, we have come to the conclusion that based on the delay of closing the transaction, in our judgment we no longer felt we were able to deliver our new Saab plan," he said.
"The company has been managed very tightly for cash, and at a certain point you have to start running the company as a growth engine, and we just weren't able to get there in time."
Fabela said the decision by Koenigsegg, maker of one of the world's fastest and most expensive sports cars, was not due to funding pressures.
"No, everything was moving, it just wasn't moving at a fast enough pace," he said.
The idea of a deal between U.S. auto giant GM and Koenigsegg, which made just 18 cars last year and has a staff of around 45, raised eyebrows since it first broke in May.
Questions over financing have dogged the proposed purchase, officially announced in August, and a final decision from the Swedish government on guarantees for crucial loans from the European Investment Bank had yet to be made.
In September, state-run Beijing Automotive Industry Holdings (BAIC) agreed to take a minority stake in Koenigsegg. That would have given BAIC a global footprint in the car industry and boosted Koenigsegg's coffers.
GM said it would assess the situation in the next few days.
A spokesman for Saab said the firm was disappointed.
"We had hoped this deal would go through," Saab spokesman Eric Geers told Reuters.
"We have a good business plan, but now Koenigsegg has pulled out, so we will have to see what will happen."
Saab sold 93,295 vehicles globally in 2008, representing 1.1 percent of total GM sales volume, down 25 percent from 2007.
For a Factbox on Saab, click
GM bought 50 percent of the firm in 1989 when Saab Automobile was established as an independent company. It bought the rest in January 2000.
(Additional reporting by Simon Johnson and Sven Nordenstam, editing by Will Waterman)
($1=7.816 Swedish Crown)