16 Feb 2009

Sweden denies break down in GM, Saab talks

11:32 am on 16 February 2009

Sweden on Sunday dismissed a TV television report that negotiations between General Motors and the government over the future of Saab have broken down.

Saab is owned by GM.

Public service broadcaster SVT reported that GM and the government were not able to agree on the terms of 5 billion Swedish crowns ($US599 million) in loan guarantees to create an independent company for Saab.

A spokeswoman for Swedish Industry Minister Maud Olofsson denied the talks had been halted.

A GM spokeswoman in Detroit was not immediately available for comment.

In December, Sweden outlined a plan to save the auto industry by offering up to 25 billion crowns in credit guarantees and emergency loans.

However, the government said it had no plans to buy stakes in Swedish car makers such as Saab or Volvo, which is owned by Ford.

The Wall Street Journal reported on Saturday that GM is mulling the option of a Chapter 11 bankruptcy filing that would create a new company.

GM is under a deadline of Tuesday to present a viability plan to the US government in exchange for $US17.4 billion in federal loans.