Sweden eyes guarantees to struggling carmakers

STOCKHOLM (Reuters) - Sweden said on Monday its talks with struggling carmakers Saab and Volvo included loan guarantees, but said no specific sum had been discussed.

Financial Times reported on Monday that U.S. carmakers GM (GM.N), which owns Saab Automobile AB, and Ford (F.N), owner of Volvo Car Corporation, had approached the Nordic country's government about financial aid to the Sweden-based subsidiaries "in anticipation of selling them."

The heads of both companies had spoken to Swedish Industry Minister Maud Olofsson about securing funds, the FT said, citing people familiar with the discussions.

Sweden denied it had outlined any details concerning loan guarantees. FT said the Swedish government has considered devoting about 2 billion Swedish crowns (162.6 million pounds) to Saab and Volvo in direct aid or loan guarantees.

"We are discussing all possibilities. But what they write, that specific amount of money in loan guarantees, that is haphazard information taken out of context and I don't understand where they've gotten it from," said Frank Nilsson, spokesman for the industry minister.

Both Saab and Volvo have suffered sharp sales declines in recent months as the global financial crisis has weighed on prospective car buyers across the world.

"It is no secret that we are speaking to Volvo and Saab, but nothing has come out of these talks," Nilsson said.

The Swedish government believed it was important that Volvo and Saab remain based in Sweden, Nilsson said, noting the government was considering many different options.

He said the government was considering two sets of measures to help the country's struggling auto industry.