May 23, 2007 / 12:02 PM / 13 years ago

Sports car maker Spyker pawns name for loan

AMSTERDAM (Reuters) - Dutch sports car maker Spyker Cars has offered up its brand name to secure a bank loan, news of which sent its shares down as much 17 percent to a 16-month low on Wednesday.

A Spyker C8 Spyder with turned aluminum dashboard and quilted orange leather interior is on display at the Los Angeles Auto Show in Los Angeles, California November 30, 2006. REUTERS/Phil McCarten (UNITED STATES)

The company, which acquired a Formula One motor racing team last year, confirmed a report by Dutch daily De Telegraaf.

“There was an agreement with Friesland Bank last year and as part of it the name has been pledged, which is quite normal,” Spyker spokeswoman Winni Kole said.

Financial market traders expressed concern, however.

“Obviously it is a very bad sign if you have to give away your name to get a loan”, a trader at Kempen & Co said.

“Why do you have to sell your name to get a loan? Because the bank thinks the results are not good enough and want security, I think,” trader Rik Zwaneveld said at AFS Brokers.

Spyker shares were down 9.5 percent at 11.15 euros by 12:11 p.m. British time, after touching a 16-month low of 10.25 euros.

“The company is in bad weather and everybody is afraid that the weather is getting worse”, Zwaneveld added.

De Telegraaf reported that Friesland Bank agreed to provide a loan of nine million euros to the car maker, five million of which has already been received by Spyker.

To get the rest of the money the car maker has to meet certain conditions, but Spyker cannot meet these, De Telegraaf said.

Spyker, which announced the departure of Chief Executive Officer Victor Muller last week, declined to comment on the details of the loan.

Spyker, which was relaunched in 2000 and realised its first net profit ever in 2006, competes with top-end sports car makers such as Bugatti, Lamborghini, Aston Martin and Ferrari in the “supercar” market niche.

The original Spyker had competed with Rolls-Royce before going bankrupt in 1926. Its roots go back more than 100 years to a family business that built the Golden State Coach for the Dutch royal family.

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