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Spyker in negotiations to sell its sports-car business to focus on Saab

Thu, 24 Feb 2011

Spyker Cars said Thursday it is negotiating to sell its sports car business to a company controlled by Russian billionaire Vladimir Antonov.

Spyker, which bought Saab from General Motors Co. a year ago, said it has signed a memorandum of understanding to sell Spyker's assets to U.K. holding company CPP Global Holdings, which is owned by Antonov.

The Dutch maker of cars such as the C8 Aileron said proceeds from the 32 million euro sale ($44 million at current exchange rates) will be used to reduce Spyker Cars' debt.

Victor Muller, Spyker Cars CEO and Saab chairman, said the sale will separate the capital structure of Spyker and Saab.

"Without Spyker we would not have been able to acquire Saab Automobile last year but the Spyker business soon became a small fish in a large pond as a result," Muller said in a statement.

Under the deal, Antonov's CPP Global Holdings would purchase virtually all assets related to Spyker's business, including the Spyker trademarks and other intellectual property rights.

Struggle to save Saab

Spyker has struggled to make money and analysts say it needs a strategic investor longer term if it is to achieve its stated goal of turning Saab into an independent and profitable niche player.

Spyker sold 36 cars in 2009, the last available data, and has been losing money since it sold shares for the first time in 2004.

Antonov held 29.9 percent of Spyker before GM demanded that he get rid of his stake before agreeing to sell Saab to Spyker. Tenaci Capital BV, a company controlled by Muller, eventually bought Antonov's stake.

Spyker owed about $101.9 million (74 million euros) to Tenaci as of Sept. 30, part of which were funds that helped finance the acquisition of Saab in February 2010. To further reduce debt and interest, Spyker within six months plans to convert $23.4 million (17 million euros) of its debt owed to Tenaci into shares, it said.

"It's a logical step to do this, so the company can focus solely on the Saab business," said Martin Crum, an analyst at Amsterdams Effectenkantoor BV. "Financially it's positive as well because the debt will be reduced. It will reinforce the balance sheet and reduce the interest the company must pay."

In January Spyker said it was confident that Saab sales would accelerate this year.

Spyker had defied skeptics last year when it rescued Saab from imminent closure and has remained bullish on its prospects, forecasting sales to rise this year to 80,000 vehicles and 120,000 in 2012.

The company said last month that Saab sold 31,696 cars in 2010 after cutting its full-year target in October to 30,000 to 35,000 vehicles, from 45,000 previously, because it had to rebuild its supplier base.

Muller will remain Spyker CEO until a successor is appointed, the company said. It will change its name "shortly" to better reflect its greater focus on Saab. Muller will remain chairman of Saab.

Wim Oude Weernink, Bloomberg News and Reuters contributed to this story

By Paul McVeigh- Automotive News Europe