General Motors Corp. says it has a memorandum of understanding to sell its Saab Automtobile AB unit to Koenigsegg Group AB of Sweden.

The Swedish government is guaranteeing $600 million in funding from the European Investment Bank to help back the deal, expected to close by the end of the third quarter, GM says.

GM and exotic-car manufacturer Koenigsegg will provide additional funding for Saab operations and products, including new models in the final stages of development, GM says.

The Detroit auto maker says it will provide Saab with architecture and powertrain technology for an undisclosed set period of time. Saab says its next-generation 9-5 will be built as planned at its Trollhattan, Sweden, plant.

“This is yet another significant step in the reinvention of GM and its European operations,” GM Europe President Carl-Peter Forster says in a statement. “Saab is a highly respected automotive brand with great potential. Closing this deal represents the best chance for Saab to emerge a stronger company.

“Koenigsegg Group's unique combination of innovation, entrepreneurial spirit and financial strength, combined with Koenigsegg's proven ability to create world-class Swedish performance cars in a highly efficient manner, made it the right choice for Saab as well as for General Motors.”