Koenigsegg 'to buy Saab'

Reports suggest GM has signed a letter of intent to sell Saab to Swedish luxury carmaker Koenigsegg and a group of Norwegian investors.

Reports on Swedish television station SVT say: "The buyers have signed a letter of intent to buy Saab. Final negotiations about details on the deal will go on in the next months."

These reports have now been confirmed by Saab insiders to news agency Reuters.

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Koenigsegg was set up in 1994 and produces just 20 of its supercars a year, selling them for around £1 million each.

Saab employs about 3400 people in Sweden. Including suppliers, 15,000 jobs in the country are believed to be at risk if the company were to close down.

Underpinning the sale reports, the Swedish government has also confirmed that it has authorised its debt office to begin talks with Saab regarding state loan guarantees for a potential new owner of the company.

"The decision means that the Debt Office can initiate negotiations with Saab, EIB and the coming owner, once one is revealed, about terms for state guarantees," a government statement said.

Less than an hour ago reports emerged suggesting Saab could be sold before the end of this week.

News agency Bloomberg is reported that negotiations were entering the final stages, and that the naming of a preferred bidder was imminent.

Saab has been operating under protection from creditors since February.

"The discussions are continuing, there is no official date that has to be reached, and this will have to take the time it takes," Saab spokesman Gunilla Gustavs told Bloomberg. "But an announcement could come as early as this week."

Reports suggest that, as part of any sale deal, current owner GM willl provide $500 million (£302 million) in assets and cash, plus production equipment for a new Saab model, as well as the $150 million (£90 million) of cash already in Saab's account.

However, the new owner would have to pay GM back if it succeeds in turning around Saab.