EIB loan approved

UPDATED – The EIB press release is below

Well, I was wrong. Apparently the announcement has been made.

From Swedish Radio (G-trans):

Saab’s loan application may be approved

Saab Automobile to borrow four billion kronor by the European Investment Bank, the Bank’s board decided today.

The loan will be used for research and development in environmental and safety.

For the money to be paid the EIB requires the Swedish government stands for guarantees.

Today’s announcement is not enough to save Saab in Trollhättan, says the company’s CIO Eric Geers.

First, the EU Commission approve the approach of government guarantee required for the loan. Since the government determines if there is a yes to the guarantees.

The Debt Office is not yet finished negotiating the terms.

Koenigsegg Group also needs to be done with the agreement with China Beijing Auto, which will become a member of the group and contribute funds that are missing.

Another step on the road, people…….and a few more remain.

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I spoke to Saab reps earlier just to see what they were expecting and it’s fair to say that they were confident the loan would go through, they were unsure how much would be made public today (this was after my post on the subject), and they were definitely just seeing it as another box ticked.

Key staff were not bunkered down preparing special EIB press releases, they were out and about, some heading to Spain for the next leg of the European Saab 9-5 roadshow.

Low key may be the flavour of the day, but I’ll pass on my own personal congratulations to Saab on another milestone being reached.

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New Saab – bring it on!!!!!!

UPDATE – Here’s the statement from the EIB’s website:

The European Investment Bank’s Board of Directors today approved loans to European-based car makers worth a total of EUR 600m.

One of the loans approved today amounts to EUR 400m for SAAB Automobile AB. The loan will be used for research and development activities for the improvement of fuel efficiency and safety including new tooling for the production of cleaner and safer cars, subject to the European Commission’s approval of the Swedish state guarantee.

EUR 200m have been approved today for Renault to support a new production facility near Tanger, Morocco, for the manufacturing of smaller cars, including the design, civil engineering, purchase of equipment and tooling of the new factory.

In total, since December 2008 the EIB has approved loans to the automotive sector (manufacturers and suppliers) worth EUR 7.56bn, whereof EUR 4.52bn under the EIB’s European Clean Transport Facility (ECTF). EUR 320m out of the EUR 400m approved for SAAB would be provided under the ECTF. The Facility, part of the EIB’s wider response under the European Economic Recovery Package, targets significant cuts in vehicles’ CO2 emissions through research, development and innovation, as well as the production of cleaner and more fuel-efficient cars and other transport and also through tangible fixed assets in related infrastructure and production plants. The remainder is intended to help SAAB improve the active and passive safety of its future vehicles.

After the approval of the operations the contracts will be negotiated and signed, followed by disbursement according to the progress of the projects. In 2009, EUR 3.6bn has already been disbursed to the automotive sector and it is forecast that this will reach around EUR 6.0bn by year-end. Further disbursements will follow in 2010.

Note for the editor:

The European Investment Bank was created by the Treaty of Rome in 1958 as the long-term lending bank of the European Union. The task of the Bank is to contribute towards the integration, balanced development and economic and social cohesion of the EU Member States. The EIB raises substantial volumes of funds on the capital markets which it lends on favourable terms to projects furthering EU policy objectives. The EIB continuously adapts its activity to developments in EU policies.

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REMEMBER – This is just the first step in a multi-step process.

The EU Commission still has to approve the loan, based on the guarantees being required not conflicting with rules on inappropriate state support.

Then the Swedish government needs to actually finalise the guarantees with Saab, which it will take advice on from the Swedish Debt Office once the payment schedules, etc, are sorted.

This was a great step, but still just a first step.

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UPDATE II:

Report in English from The Local:

European bank approves Saab loan request

Saab Automobile has received permission to borrow 4 billion kronor from the European Investment Bank, the bank’s board revealed on Wednesday.

Prior to Wednesday’s meeting, most indications were that the EIB board, which includes representatives from all 27 European Union members states, would approve Saab’s request.

The EIB leadership group had recommended to the board that the bank agree to lend the Swedish car company up to €400 million, or roughly 4.1 billion kronor ($590 million), having concluded that Saab’s application was sufficiently strong.

The loan is a critical lifeline for Saab, and was a key element for the planned takeover of the company by the Koenigsegg Group.

“It wasn’t totally unexpected. It was an incredibly important step for Saab’s future. Without the loan, it would have been a nonstarter,” Jöran Hägglund, a state secretary with Sweden’s industry ministry, told the TT news agency.

The loan will be used to fund research and development of technologies related to the environment and safety.

Before lending Saab the money, the EIB requires that the Swedish state guarantee the loan.

Nice to hear Jöran in a good mood 🙂

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