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Sweden says private buyer only option for Saab

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Sweden says private buyer only option for Saab

NOVEMBER 24, 2009 - 2:01 PM ET

STOCKHOLM (Reuters) -- Sweden effectively ruled out a state bailout of GM's loss-making Saab unit today after tiny luxury car firm Koenigsegg pulled out of a bid for one of the Nordic country's best-known automobile brands.

"You can't, by state aid, keep a company ongoing, if you don't have any chance for a competitive company," Joran Hagglund, state secretary at Sweden's Industry Ministry, told reporters.

"That can only be assured by a private owner who really is familiar with the market conditions."

Earlier on Tuesday, Koenigsegg pulled out of its planned purchase of Saab, which has estimated it would lose around 6 billion Swedish crowns ($865 million) in the 2008-2009 period.

Hagglund, however, did not rule out all support for Saab -- if it can find another private buyer.

He said the Swedish government would not own assets in the automotive industry. "But we can facilitate with loan guarantees and we also have this tool of a rescue loan with very hard conditions," he said.

"We are willing to discuss that with any potential buyer for Saab."

The government said in December last year it would provide up to 20 billion crowns in credit guarantees and a further 5 billion crowns in emergency loans to the auto industry.

Finance Minister Anders Borg said at the time that the funds would be allocated with the aim of ensuring local manufacturers' r&d projects, as well as production, remained in Sweden.

IF Metall union representative Stefan Lofven said it was not only Saab's production that was at risk.

"It is about the thousands of employees in the supplier chain and even more in other sectors that are dependent on Saab," he said.

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I wished I had money to buy SAAB. I would make it a quirky RWD brand.

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I wished I had money to buy SAAB. I would make it a quirky RWD brand.

Quirky like "burning man" quirky? ;-)

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