A Swedish court Wednesday is expected to approve Saab Automobile AB's proposal to slash its debt to hundreds of creditors, after General Motors Corp. (GMGMQ) Tuesday said it had agreed to sell the unit to Swedish supercar maker Koenigsegg Group AB for an undisclosed sum.

Saab has proposed under the plan to settle its debts by paying 25% of around 10.5 billion Swedish kronor ($1.34 billion) owed to more than 600 creditors, including auto suppliers and the Swedish government. The vast majority of the debt, almost SEK10 billion, is owed to GM.

Saab spokeswoman Gunilla Gustavs said Tuesday that GM's tentative agreement with Koenigsegg doesn't change the outlook for Wednesday's court case.

"Writing down the debt has always been part of the plans" to attract a buyer for the car maker, Gustavs said.

If GM agrees to write off 75% of Saab's debt, it would mean a reduction of around SEK7.5 billion, which would otherwise have been assumed by the buyer.

Gustavs said Saab's proposal was likely to get the necessary approval both of 75% of the creditors and of creditors representing at least 75% of the total debt, as GM, which supports the plan, holds over 90% of its debt and Saab has gained approval from over 80% of the creditors.

The Vanersborg District Court in southwestern Sweden will start processing the case Wednesday and may reach a decision later the same day, district court judge Cecilia Tisell told Dow Jones Newswires Tuesday.

Saab, which entered bankruptcy protection in February, has asked its creditors to support its proposal, arguing that they would likely end up receiving at most 15% of what they were owed if Saab was forced into bankruptcy.

GM itself filed for protection from its creditors earlier this month.

Company Web site: www.saab.com

-By Gustav Sandstrom, Dow Jones Newswires; +46-8-5451-3099; gustav.sandstrom@dowjones.com and Ola Kinnander, Dow Jones Newswires; +46-8-5451-3097; ola.kinnander@dowjones.com