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Business

Sweden and GM paving the way to Saab's impending bankruptcy

Latest update : 2009-02-18

Abandoned by US carmaker General Motors, Saab is still looking for a rescue plan, the Swedish government having also refused to help the company, despite impending bankruptcy. Saab will now try to obtain a loan from the European Investment Bank.

AFP - Swedish automaker Saab wants to tap the European Investment Bank (EIB) for emergency funding as its US owner General Motors prepares to sell the company, Sweden's minister for enterprise and energy said Tuesday.
   
Maud Olofsson told Swedish television that "it is clear that GM wants to sell Saab," adding that the government may act as a guarantor for any EIB loan to Saab.
   
US auto giant GM, itself seeking another bailout from Washington, had announced in December it planned to sell Saab, but the loss-making Swedish brand needs extra funding to secure its survival.
   
Discussions on securing a loan initially took place between Saab, GM and the Swedish government at the start of December. Swedish press reports say Saab is seeking to borrow as much as 475 million euros (600 million dollars).
   
Meanwhile, General Motors, after securing just over nine billon dollars in emergency funding in January, presented a restructuring plan to the US Treasury late Tuesday.
   
Volvo Cars, owned by US automaker Ford, requested a loan of 475 million euros from the EIB at the end of January.
   
Around three-quarters of a rescue plan for the Swedish car industry amounting to 28 billion kronor (2.7 billion euros) consists of Swedish government guarantees for loans from the EIB.
  

Date created : 2009-02-18

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