STOCKHOLM (Reuters) - Cash-strapped automaker Saab said Monday it plans to continue talks this week to secure funding amid concern that the terms attached to a deal would be too onerous for the long-running Swedish brand.
Saab received a conditional "yes" from the European Investment Bank (EIB) on a deal aimed at giving the Swedish carmaker a cash lifeline but has called the EIB's terms tough and remains unsure when it will have enough cash to get production going again.
"We are doing whatever we can to try and secure funding. There are lots of discussions with various parties and stakeholders and those will continue this week," Saab spokesman Eric Geers said.
Saab ran into a cash crunch in its first year of ownership under Dutch automaker Spyker after its 2010 sales fell short of forecasts. Production in Sweden has been halted for more than two weeks after it failed to pay some of its suppliers.
Under the financing deal, Russian financier Vladimir Antonov -- who also eventually wants to become a shareholder in Saab -- is to buy Saab's plant and other real estate and lease it back to the car maker.
Saab had been hoping the EIB would sign off quickly on the capital injection after the Swedish state backed the agreement last week.
But there are concerns that the ailing car maker might not be able to meet the conditions set in the draft letter from the EIB.
Lars Carlstrom, a representative for Antonov in Sweden, said one of the conditions was that Saab repay money it had already borrowed within 90 days of the sale.
"Saab cannot live with that," he told Reuters. "If you agree to the EIB conditions, you need to close business. It is ridiculous, a ridiculous letter from the EIB which totally kills Saab's business."
Saab needs approval for the agreement from the Swedish state and the EIB after the bank lent 400 million euros ($558.8 million) to the car maker, which Sweden guaranteed.
Saab has drawn 217 million euros of the loan, which under the new financing scheme will now be capped at 280 million euros.
The EIB was unavailable for comment on Monday.
Production at Saab has been halted for more than two weeks after it failed to pay suppliers' bills due to a cash crunch.
Sweden's main industrial workers' union IF Metall said in a statement on Monday that it couldn't see why there had not been a quick approval from the EIB after nods from both the Swedish state and the debt office.
"What information is the EIB providing? It is said that the terms are harsh. What are the terms? We require information on what this is about. It is time that everyone involved speaks out," IF Metall chairman Stefan Lofven said.
Carlstrom said Antonov would be meeting with the Swedish debt office on Tuesday regarding his application to take a stake in Saab.