EU approves Saab loan guarantee

Sweden's Saab won EU regulatory approval for a state guarantee of a 400 million euro ($NZ768.25 million) European Investment Bank loan, key to the carmaker's sale to Dutch peer Spyker by General Motors.

Tiny, loss-making luxury carmaker Spyker clinched the $US400 million takeover last month and estimated it would need about $US1 billion for Saab to develop three or four niche models. Part of these costs will come from the EIB loan. 

The European Commission said about four-fifths of the guarantee was subject to rules allowing European Union countries to facilitate access to financing by crisis-hit companies.

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

The Commission said the remaining 17.2 percent was not considered to be state aid, and therefore not subject to EU scrutiny, as it would be provided on market conditions.

- Reuters