Volvo, Saab get reprieve as Sweden unveils $3.5 billion bailout

11 December 2008

Sweden on Friday announced a Kroner 28 billion ($3.5 billion) government bail-out plan for its troubled carmakers, Volvo and Saab, to help them cope with falling demand.

The move, coming after the House of Representatives approved a $14 billion rescue for US automakers, effectively ends sell-off rumors about Volvo.

Volvo and Saab, both owned by US business groups, had been seeking government support because of the financial woes at home.

Volvo is owned by Ford Motor Co, while Saab is owned by General Motors, both of which are covered by the US rescue plan.

Under the bail-out plan, the government will give a maximum of Kroner 20 billion in credit guarantees, and up to Kroner 5 billion in loans. It would also offer another Kroner 3 billion for research and development efforts.

The bailout package will be effective from the day the Swedish parliament approves the bill, the government said.