OSLO, Dec 16 (Reuters) - The Norwegian government said on Tuesday it will not directly intervene to rescue electric car maker Think after the company on Monday halted production and said it would not survive without the state’s aid.
Privately owned Think had asked the government to help it out of its “urgent financial distress” sparked by the global crisis, saying it had difficulty obtaining working capital and that its suppliers are severely hit.
“There are many companies that are in a demanding financial situation because of the financial crisis,” Deputy Minister of Trade and Industry Rikke Lind told Reuters.
“The government cannot go in on the ownership side or provide loans to specific companies in today’s situation,” she said.
Think has said it needs 100 million to 200 million crowns ($14.5 million to $29 million) in short-term guarantees after it temporarily stopped production at its Norway plant and laid off between 50 percent and 70 percent of its employees to survive and proceed with expansion plans.
Norway’s government is preparing a fiscal stimulus package to combat unemployment and shore up its construction industry, due to be presented in late January or early February.
The government has approved an increase in loan support for Innovasjon Norge, an organisation fostering small- and medium-sized companies, by 1 billion crowns to 2.5 billion, in effect from Jan. 1, 2009, from which Think could apply for loans.
It has also said it will boost export credit institution Eksportfinans with about 50 billion crowns to ensure exporters get the financing they need to sustain operations.
“Think needs to contact the apparatus, where we have different lending and guarantee options, but they have to be considered in line with everybody else,” Lind said.
Think was not immediately available for comment.
Earlier in December, the Swedish government said it would provide up to 25 billion Swedish crowns ($3.12 billion) in credit guarantees and emergency loans to its ailing auto industry but has no plans to buy stakes in Volvo or Saab.
With one car model in production, the micro Th!nk City, the Norwegian company aims to ramp up production next year, launch the car in several European cities and set a date for its U.S. entry. (Editing by Andrew Macdonald)