New Saab owner to terminate 81 U.S. dealerships

14 November 2009 @ 01:47 am EDT

Swedish carmaker Koenigsegg will terminate more than a third of U.S. Saab dealers when it completes its purchase of the premium brand from General Motors Co, GM said in a letter to dealers on Thursday.

The Saab corporate logo is seen on the hood of a Saab automobile in Trollhattan June 10, 2009. General Motors Corp' Saab Automobile unit has narrowed talks with potential buyers for the loss-making Swedish brand to two, Saab's top executive was quoted as saying in a Swedish business daily on Tuesday.

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The new owner will reject 81 Saab dealers in the United States, while moving forward with the remaining 137 dealers after the deal closes by a targeted date of Nov. 30.

GM notified the terminated dealerships of the decision on Thursday, GM spokeswoman Ryndee Carney said.

All Saab dealers signed a termination agreement in June when GM filed for Chapter 11 bankruptcy protection. The terms of those termination agreements will go into effect for rejected dealerships, Carney said.

Koenigsegg will operate the brand through a new entity, Saab Cars North America Inc.

GM signed a deal to sell Saab to the small Swedish luxury carmaker in August, but the closing of the deal is contingent on Saab receiving loans from the European Investment Bank that are guaranteed by the Swedish government.

In October, the EIB granted Saab a 400 million euro ($600 million) loan -- a key component in the planned sale -- but the Swedish government must step in with a guarantee if the funds are to be paid out.

If the deal to sell Saab falls through, GM would close Saab and all the dealerships would be terminated, Carney said.

The No. 1 U.S. automaker is eliminating four of its eight brands, by selling Saab and Hummer, and winding down Pontiac and Saturn.

(Reporting by Soyoung Kim; Editing by Steve Orlofsky)