Sweden unlikely to relax loan rules for Saab: official

Saab, whose future may be decided by owner General Motors Co. next week, has asked the Swedish government to make as much as 5 billion kronor ($717 million) available in emergency loans, and to inform GM of this before a board meeting on Dec. 1. A government delegation will travel to the U.S. for talks with GM before the meeting.

Sweden is unlikely to relax its rules, Hans Pettersson, a deputy director at Sweden's Enterprise Ministry who will be part of the group visiting GM, said in a telephone interview today.

Saab was one of several brands the U.S. carmaker planned to unload to focus on its restructuring after emerging from bankruptcy. GM may shut Saab after a sale to sports-car maker Koenigsegg Group AB failed. GM could also decide to keep Saab.

“It's easy to propose things, but unfortunately it's not so easy to carry them out,” Pettersson said. “We are not preparing right now for a new parliamentary decision. That the parliament would make a decision by Tuesday is not very likely.”

A decision by the Swedish legislature is necessary to relax rules which stipulate that loans must be repaid in six months -- a condition Saab and others have criticized as unrealistic.

Lifeline

Paul Aakerlund, head of Saab's IF Metall labor union and a member of its board, said on Nov. 26 that Swedish state aid might persuade GM to keep Saab going until a buyer is found.

Beijing Automotive Industry Holding Co., Merbanco Inc. and Renco Group Inc. have made approaches to Saab since Koenigsegg Group dropped a bid Nov. 24, according to two people familiar with the situation.

GM may not welcome a Swedish emergency loan, considering the guarantees Sweden would impose on GM, Pettersson said.

“The government would not provide a loan to Saab in this situation if it didn't know it would get the money back,” he said. “That means we must have guarantees from GM that we get this money back. The question is if GM would be willing to risk losing this money. I don't think GM would perceive it as a big help from Sweden if we provide a loan with the conditions that are necessary to secure the tax payers' money.”

Pettersson declined to say what message the government has for GM before the U.S. carmaker's board meeting.

Saab Hopeful

Saab spokeswoman Gunilla Gustavs said Saab is hopeful the government's meeting with GM will be productive. “It's good that they're going,” she said today by telephone. “Let's hope that something concrete comes out of this.”

Saab has “seriously interested potential buyers,” she said. She declined to comment on when a deal with a potential investor could be ready.

GM prepared 86 contracts in connection with the planned sale to Koenigsegg Group and a lot of that work could be used with another buyer, she said.

“A lot of the hard work in detailing the agreements is done and ready to go,” she said.

Pettersson said the Swedish government is hopeful that GM either will find a new owner for Saab or keep the unit.

“There appear to be interested parties, but it's the time factor that's the problem,” he said.

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