* Newspaper Dagens Industri: GM could put 3.5 bln SEK into
* Dagens Industri: Saab could file reorganisation Friday
* Board meeting Thu to reconvene at later date - union rep
* Reorganisation is alternative to a bankruptcy filing
* Saab declines comment
(Adds newspaper source on restructuring plan)
By Victoria Klesty
STOCKHOLM, Feb 19 General Motors Corp (GM.N) is
prepared to pump in $400 million to help make its Saab car unit
profitable if the Swedish state guarantees an even bigger loan
to the firm, Swedish daily Dagens Industri said on Thursday,
citing unnamed sources.
The newspaper said GM had told unions at a Saab board
meeting on Thursday it was prepared to put 3.5 billion Swedish
crowns into the firm if the Swedish government guaranteed a 5.2
billion crown loan to Saab.
Part of the money would be used to launch new models and
part to cover the loss made by Saab last year. The goal is to
help it reach annual sales of 120,000-130,000 vehicles, which
would make the firm profitable by 2011 or 2012, Dagens Industri
Many analysts believe Saab would need much more money
pumped into it to turn it around.
A union representative told Reuters the Saab board met on
Thursday and was set to reconvene at an unspecified date.
Swedish media reported the meeting was to decide on filing for
protection from creditors.
Dagens Industri said a decision on applying for a
reorganisation could come on Friday.
A Saab spokeswoman declined to comment.
A reorganisation filing, which is an alternative to an
outright bankruptcy filing, would be made with a Swedish court
after which the viability of continuing operations is
GM said earlier this week Saab could file for
reorganisation as early as this month and that it still hoped
to reach an agreement with Sweden on aid for the brand.
The Swedish government, however, has said its talks with GM
over state aid for Saab lacked a realistic basis. Furthermore,
it has ruled out owning carmakers or their factories and
accused GM of shirking its responsibility as an owner.
Martin Skold, an assistant professor at the Stockholm
School of Economics, who analyzes the car industry, said the
reorganisation would need to define the legal relationship
between Saab and its parent GM.
Cutting legal ties could save GM hundreds of millions of
dollars in costs if Saab were to go bankrupt.
In a business reorganisation, a company seeks protection
from creditors while it comes up with a plan to become
profitable. It is an alternative to bankruptcy, said Sven Save
at Ackordscentralen, a Swedish consultancy firm which handles
A reconstruction could mean measures such as job cuts, a
sale of assets or a debt writedown.
Creditors who risk not getting any money at all if the
company goes bankrupt, have to be convinced at a first court
hearing that lowering their claims is in their best interest.
If no creditors object to the plan at the start of the
procedures, they cannot demand a liquidation of the company in
a later stage of the reorganisation which can last up to a
Joran Hagglund, state secretary at the Swedish Industry
Ministry, said he had no information on whether Saab was set to
apply for reorganisation and that the government was monitoring
"We continue to analyse the situation and what can happen
if there is a reorganisation," Hagglund told Reuters.
GM said in its restructuring plan submitted to the U.S.
Treasury on Tuesday that it would cap its financial support for
Saab and aimed for the Swedish unit to become an independent
business as of Jan. 1, 2010. [ID:nN17397164]
(Additional reporting by Anna Ringstrom and Simon Johnson;
Writing by Niklas Pollard; Editing by Simon Jessop and David