December 2, 2009 / 1:40 AM / 9 years ago

UPDATE 4-GM to consider Saab sale until year end

* GM board says has received interest in Saab

* GM to consider offers for Swedish brand until year-end

* Saab will face wind-down if no deal seen (Adds details on GM’s attempts to sell other brands)

By David Bailey

DETROIT, Dec 1 (Reuters) - General Motors Co [GM.UL] said on Tuesday that it would consider offers for its Saab brand until the end of the month and move to close the Swedish unit then if it appears that it cannot be sold.

The announcement from GM came after a meeting of the automaker’s 13-member board of directors in Detroit, at which the company’s chief executive resigned, and an appeal by Sweden to consider steps to save Saab.

“The board will evaluate potential bids between now and the end of December,” GM said in a brief statement. “At that time, we will determine whether a suitable arrangement for Saab exists. If not, we will begin an orderly wind down of the global Saab business at that time.”

The statement came less than two hours before GM Chairman Ed Whitacre announced that Chief Executive Fritz Henderson had resigned after “all involved agree that changes needed to be made.” Whitacre is serving as an interim CEO.

GM said there had been an outreach from several interested parties in the Saab brand, but declined to name those potential bidders, citing confidentiality agreements.

Most analysts see a Saab closure as the most likely outcome for the 60-year-old auto brand after an earlier deal to sell the unit to Swedish luxury car builder Koenigsegg collapsed.

“Basically it’s a reprieve, but the sands in the hourglass are running,” Autoconomy analyst Erich Merkle said. “There is not a lot of time there with Saab.”

“To think that you are going to save Saab would be a decision completely based on emotion,” Merkle said.

A Swedish government delegation met with GM representatives on Monday in Detroit in a bid to head off an immediate closure of Saab that would affect some 8,000 workers that rely on it in Sweden.

“I think we came as far as we could at this point,” said Swedish government spokesman Frank Nilsson, who spoke by phone from GM headquarters. “What’s positive is that the process continues.”

From Sweden, Saab spokesman Eric Geers said there are a number of parties seriously interested in buying Saab. He did not know how far the bidding process had gone.

“We are confident” Saab will find a new owner, Geers said.

Swedish Enterprise Minister Maud Olofsson said it was too early to say if Saab would survive, but was glad the government had convinced GM to look at other possible buyers and would do all it could to help the process. [ID:nGEE5B02P1]

“But as long as there are interested parties, we want GM to assess them,” Olofsson told Reuters.

“It is a complicated issue to buy Saab,” she said. “The buyer needs to have enough financial muscle to buy the company and to develop Saab.”

The collapse of the Saab sale to Koenigsegg was just the latest setback for GM in its attempts to divest brands.

In September, GM opted to shutter Saturn after a deal to sell the brand to Penske Automotive Group fell through. And in early November GM opted to keep its European Opel brand rather than complete a planned sale of a majority stake.

GM bought 50 percent of the Saab car operations in 1990 for about $700 million. It paid $125 million and assumed debt for the remainder of the unit in 2000.

But the Swedish luxury brand best known for its 9-5 and 9-3 sedans had consistently lost money for GM over the past two decades.

Efforts to use GM platforms to engineer recent Saab models failed to win back buyers and an ad campaign to sell the brand as “Born from Jets” fizzled.

Koenigsegg, a Swedish company that hand builds sports cars that sell for $1 million, said in late November it was pulling out of the deal because of the risk of delays in closing five months after reaching a preliminary deal with GM.

Beijing Automotive Industry Holding Co, China’s No. 10 automaker, had planned to take a stake in Koenigsegg as part of the Saab bid. BAIC is seen as one potential bidder for Saab.

Two U.S. investors, Wyoming-based Merbanco Merchant Banking and U.S. financier Ira Rennert and his Renco Group have also expressed an interest in pursuing a deal for Saab. (Additional reporting by Kevin Krolicki in Los Angeles and Simon Johnson in Stockholm; editing by Matthew Lewis, Carol Bishopric and Leslie Gevirtz) ((kevin.krolicki@thomsonreuters.com; + 1 313 300 7276))

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