Indian Car Blog - Carazoo.com

Swedish supercar maker Koenigsegg Group AB on Tuesday has backed out on its potential deal with GM to buy its Saab car brand. Call it an example of “bad timing”. That’s just what Koenigsegg Group AB’s chairman Augie K. Fabela II calls it as. He says the decision to pull out of the deal was purely due to the timing, but funding issues had been worked out.

It was just a matter of executing he plan and the plan was fully funded. KoenigseggGroup AB took some precautionary steps in earlier months to secure the deal after in August it said it lacked about 3 billion kronor ($417 million) to conclude the deal. The company went to the Swedish National Debt Office about the government guarantee for the loan it needed to buy the unit.

Though official amount for the acquisition was never announced, it was rumored that GM would get about $500 million dollars. GM Chief Executive Fritz Henderson said the company was "obviously disappointed," but "will take the next several days to assess the situation and will advise on the next steps next week."

The dead in the water deal lays question to the future of Saab. Saab was one of the brands GM announced it would shed as part of its bankruptcy reorganization earlier this year. It currently employs 4,500 employees a majority of which live in Sweden. GM in recent months has been eliminating existing inventory and taking steps to handover the company to Koenigsegg Group AB, a move it must now reverse.

GM might be able to find another buyer for Saab though, automakers in China and India have been buying brands from restructuring US automakers. Last year Ford sold the Jaguar and Land Rover brands to Indian automaker Tata and GM recently sold its Hummer brand to Chinese heavy equipment manufacturer Sichuan Tengzhong Heavy Industrial Machinery Corp.

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