I knew when I read Maud Olofsson’s name in this story, that it’d be bad news. Not that it’s her fault or anything. Not at all. It’s just process. But all that we ever get when she speaks is bad news.
Here’s hoping she’s incorrect on this occasion. The EIB is meeting next week and from there, it was supposed to be quite a quick process.
UMEA, Sweden, Oct 15 (Reuters) – A decision on whether the Swedish government will give loan guarantees to troubled auto maker Saab is still a couple of months away, the country’s enterprise minister told Reuters on Thursday.
The Swedish government said last week it had asked the European Commission to assess whether proposed loan guarantees to Saab Automobile would break rules on state support.
Sweden’s Enterprise Minister Maud Olofsson said it would take some time for the Commission to reach a decision.
“A couple of months, I think they have said,” Olofsson told Reuters on the sidelines of an informal meeting of European ministers in Umea, northern Sweden.
Olofsson said Sweden could not make its decision until after the Commission had given its verdict.
“You cannot say when this will be done and the company knows this. I cannot affect the EIB nor the Commission on this,” she said.
Swedish luxury car maker Koenigsegg, backed by U.S. and Norwegian investors, struck a deal this year to buy GM’s [GM.UL] loss-making Saab Automobile business, but its ability to finance the purchase and future Saab production has remained in question.
“We have said in what order we need to proceed. There is a need for private capital, the loan from the EIB, an approval from the European Commission and then a possible guarantee from us,” Olofsson said.
A loan of 400 million euros ($596 million) from the European Investment Bank, to be guaranteed by the Sweden state, has been a key element of financing plans.
In September State-run Beijing Automotive Industry Holdings announced they would take a minority stake in Koenigsegg, easing some of the funding concerns surrounding the firm’s planned purchase of Saab.
Private capital – well, they have their own investments as well money from BAIC.
EIB Loan – being decided upon next week. Business plan has been stress tested and found to be credible and Maud’s own sidekick, Joran Hagglund has started to speak positively about things.
So why will it take months for the European Commission to consider this? Either it’s in compliance with their rules or it isn’t. It shouldn’t be that hard to figure out. And why can’t that be considered in concurrence with the EIB loan application?
Like I said, it’s just process. But something about Maud spelling it out the way she does makes me want to punch a kitten in the mouth.
Actually, the more I think about this, the more ridiculous it sounds.
I’m familiar enough with the workings of government to know that someone, somewhere, should have covered this off by now. The Swedes have known about Saab’s impending separation from GM, most likely since late 2008. They’ve known that Saab intended to apply for EIB loans since early 2009.
That someone in the Industry Ministry hasn’t already checked this out just seems impossible to believe. It’s a fundamental of the whole process. If the loan is in contravention of EU guidelines then the whole of 2009 has been a waste, which they could have avoided.
Put it this way – if the EU Commission denies this loan then the Swedish Government should be damned for their incompetence in letting the whole affair proceed this far. The situation has changed as the year’s progressed, but it hasn’t been so fluid as to make such an assessment impossible.