EU approves Swedish State guarantee for automaker Saab to loan

08:37, February 09, 2010      

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The European Commission said on Monday it had approved plans by Sweden to provide a guarantee that would enable automaker Saab to access a loan from the European Investment Bank (EIB).

The European Union (EU)'s competition guardian found that 82.8 percent of the guarantee to be provided by Sweden was in line with its temporary rules on state aid measures, which gives member states additional scope to facilitate access to financing in the present economic and financial crisis.

The remaining 17.2 percent would be provided on market conditions and therefore does not constitute state aid.

The loan to be granted by the EIB, the EU's investment arm, would co-finance Saab's business plan in the light of its sale by current owner General Motors to Dutch carmaker Spyker Cars.

According to the business plan, Saab intends to use the EIB loan of 400 million euros (547 million U.S. dollars) for an investment project worth 1 billion euros (1.37 billion U.S. dollars) related to inter alia fuel efficiency and car safety.

Saab would pay a premium for the guarantee and provide the Swedish government with high-quality collateral covering the full guaranteed amount, which could be called upon by the Swedish state if it had to pay out any money under the guarantee.

"The state guarantee will contribute to the implementation of Saab's business plan without giving rise to any undue distortions of competition," said EU Competition Commissioner Neelie Kroes.

Source: Xinhua
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