Swedish government casts doubt on loans to Saab

Nov 27, 2009, 12:10 GMT

Stockholm - The Swedish government said Friday it has no plans to offer emergency loans to Saab, the ailing subsidiary of US giant General Motors (GM).

The future of the carmaker was cast in doubt earlier this week when a consortium structured around the Koenigsegg Group, a low- volume Swedish sports car maker, announced its surprise withdrawal from talks with GM.

GM has not been in talks with other potential buyers for months. Earlier this year it said it planned to shed its Swedish subsidiary as part of a sell-off, which was originally to include German subsidiary Opel.

A bridging loan to Saab was unlikely, Finance Minister Anders Borg told Swedish radio news.

Saab chief executive Jan Ake Jonsson late Thursday said other possible groups were eyeing Saab, but that time was running out.

GM was due next week to discuss its plans for Saab. At stake are some 3,500 jobs at Saab and an additional 3,000 positions with subcontractors, according to the Automotive Supplier Industry.

Swedish analysts said Saab faced closure unless another buyer emerged soon.

Among possible contenders were Chinese group Beijing Automotive Industry Holdings (BAIC), and Chinese carmaker Geely, which is also in talks to take over Volvo, the Swedish subsidiary of Ford Motor Co.

Geely has 'sufficient financial support to go through with the deal,' Anders Fogel, spokesman for Geely in Sweden, said Friday.

Fogel told Swedish radio that Ford and Geely had also agreed on the tricky issue of rights concerning the use of technology and other patents in Volvo cars.

GM's interest in Saab - one of Europe's smallest carmakers - dates back to the early 1990s. The company took full control in 2000.