AMSTERDAM Loss-making Spyker Cars SPYKR.AS is selling its niche luxury car business to a Russian investor to focus on the much larger Saab operation it bought last year.
The sale could raise 32 million euros and, with other planned repayments, will cut Spyker's borrowings to 25 million euros from 92 million now, Chief Executive Victor Muller said.
The deal excludes Saab's debt, which consists of a 400 million euro loan from the European Investment Bank.
Spyker shares, which tend to be volatile, surged nearly 13 percent after opening down 4 percent. They were up 3 percent at 9:01 a.m. EST.
Vladimir Antonov, a Russian businessman who previously had a stake in Spyker and is still keen to own shares in it, will buy the Spyker sportscar assets through his UK holding company, CPP Global Holdings, for an initial 15 million euros.
Netherlands-based Spyker has struggled to make money and analysts say it needs a long-term strategic investor to restore Sweden's Saab as a profitable player.
Spyker's sports cars have appeared in Hollywood films including The Pink Panther and Basic Instinct 2. Only a few dozen are produced each year, with a list price of about 200,000 euros for the C8 Aileron.
"Spyker's (luxury car business) is a small fish in a large pond. Spyker would need additional funds, but to issue shares and dilute shareholders seemed like a very bad plan so we decided to divest these activities," Muller told reporters.
Muller, a classic car collector who made his fortune in the fashion industry, has often called Spyker's sportscar business "my baby." But on Thursday, he said the decision to sell would allow the luxury car operations to "spread its wings without being restricted by the capital structure" of the listed parent.
The listed parent will be renamed in May, Muller said, and would probably include Saab in its new name, with a listing in Stockholm still on the cards.
"It is good Muller is doing this because Saab has to become profitable again quickly," said Patrick Beijersbergen of Dutch shareholders group VEB.
Proceeds from the sale will be used to repay Muller's private investment company Tenaci Capital, which lent money to Spyker.
Muller and Antonov have had close and complex financial dealings in the past: the Russian businessman helped fund Spyker's acquisition of Saab from GM (GM.N) last February, among other deals, Muller said. Muller said he did not have any shares in Antonov's company CPP.
With a stock market capitalization of just 92 million euros, Spyker attracts few big fund managers but has a retail following partly because of its famous brands.
It reported a 50 million euros operating loss for the third quarter on sales of 275 million euros, against a 3.4 million loss a year earlier. Full-year results are due on March 25.
Last month, Spyker said that Saab sales more than doubled in the fourth quarter from a year earlier.
Muller is keen to push Saab sales in the fast-growing, populous BRIC economies of Brazil, Russia, India and China and in December Saab announced a distribution deal with Beijing-based China Automobile Trading Co. Ltd (CATC).
Muller also wants to revive Saab in the United States.
Spyker faced wide skepticism when it rescued Saab from imminent closure but has remained bullish, forecasting sales to rise this year to 80,000 vehicles and 120,000 in 2012.
Saab sold 31,696 cars in 2010 after cutting its full-year target in October to 30,000-35,000 vehicles from 45,000.
(Additional reporting by Djaja Ottenhof; Editing by David Cowell)