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Sweden,GM talks run aground?

2009-02-16 07:12

Stockholm - Sweden's government on Sunday dismissed a Swedish television report that negotiations between struggling US car maker General Motors Corp (GM) and Sweden over GM's loss-making car maker Saab have broken down.

GM and the Swedish government were not able to agree on the terms of 5 billion Swedish crowns ($599 million) in loan guarantees to create an independent company of Saab, public service broadcaster SVT said, citing sources.

Lisa Warn, spokeswoman for Swedish Industry Minister Maud Olofsson, denied talks with GM had been halted.

"Discussions are ongoing. This (report) is something we don't recognise at all," Warn said.

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

In December, Sweden outlined a plan to save its ailing auto industry by offering up to 25 billion crowns in credit guarantees and emergency loans, but said it had no plans to buy stakes in Swedish car makers Saab or Ford-owned Volvo.

GM was mulling the option of a Chapter 11 bankruptcy filing that would create a new company, the Wall Street Journal said in its Saturday edition. It is nearing a Tuesday deadline to present a viability plan to the US government.

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