DETROIT and STOCKHOLM, June 24 /PRNewswire/ -- Initiatives designed to support the expansion of Saab Automobile AB in some of the world's key markets were announced today by General Motors Corporation (NYSE: GM) and its subsidiary Adam Opel AG, and the Swedish industrial holding company Investor AB. GM/Opel and Investor each own 50 percent of the Swedish auto company in a joint-venture agreement. Under the recapitalization agreement reached between GM/Opel and Investor, each will provide Saab Automobile AB 1.74 billion Swedish kronor ($262 million), or a total of 3.48 billion kronor ($524 million), in new capital during the 1996-1997 time frame. "This plan is designed to increase sales volume by more than 50 percent over the next five years by enabling Saab to introduce several new products, expand in key markets, such as North America, Europe and Japan, and to strengthen Saab's premium brand identity," said Saab Automobile AB Chairman Louis R. Hughes, who is also a GM executive vice president and president of GM International Operations. The restructuring agreement also calls for Opel to convert to equity an outstanding loan to Saab of about 1.143 billion kronor ($172 million). In addition, Investor has agreed to pay GM/Opel $125 million (830 million kronor). Investor will also acquire from Saab Automobile AB a former manufacturing plant located in Malmoe, Sweden. "Investor is renewing its long-term commitment in Saab Automobile," Investor AB President Claes Dahlbaeck said. "At the same time, Investor and GM agree that the long-term viability of the company will be enhanced if Saab continues to develop a closer association with production and marketing expertise found at GM's worldwide operations." Under this new agreement, GM/Opel will be given the right to purchase all or a part of Investor's shares in Saab Automobile AB in the 1999-2000 time frame. Additionally, Investor has obtained the right to sell to GM/Opel up to half of its shares in Saab Automobile AB in 2000, if GM/Opel has not already exercised its option to buy those shares. "Saab Automobile will continue to implement aggressive lean-manufacturing and global product-development initiatives in order to build on the achievements that have already enabled Saab to achieve substantial cost reductions, while maintaining top levels of quality and customer satisfaction," Hughes said. "Achievements at Saab to date include a significant financial turnaround since 1990. Also, the Saab 900 was recently recognized as attaining the most-improved quality by the J. D. Power and Associates '1996 Initial Quality Study,' and now ranks among the top 10 brands in the U.S. market in terms of quality," Hughes explained. Last week, it was announced that Robert W. Hendry has been appointed president and chief executive officer of Saab Automobile AB, effective August 1, 1996, succeeding Keith Butler-Wheelhouse, who is leaving the company in order to pursue another business opportunity. -0- 6/24/96 /CONTACT: Mark Tanner of GM Detroit: 313-556-2019, Ken Levy of GM Europe Zurich: 41-1-828-2520, Nils-Ingvar Lundin of Investor Stockholm: 46-8-614-20-49, or Olle Axelson of Saab Trollhattan: 46-520-851-10/ (GM) CO: General Motors Corporation; Adam Opel AG; Investor AB; Saab Automobile AB ST: Michigan IN: AUT SU: RCN -0- (PRN) Jun/24/96 8:03 EOS (PRN) Jun/24/96 08:03 86 â -0- (PRN) Jun/24/96 8:18
SAAB AUTOMOBILE AB TO EXPAND IN KEY MARKETS AND RECEIVE CAPITAL
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