Volvo, Belgium's Flanders discuss loan guarantees

BRUSSELS May 25 (Reuters) - Ford-owned Volvo Car Corp (F.N) and the Belgian region of Flanders will examine the latter's offer of 200-300 million euros ($280-$420 million) in loan guarantees for the carmaker.

Volvo Chief Executive Stephen Odell and Flemish Premier Kris Peeters agreed at a meeting on Monday to set up a working party to thrash out details of a potential deal, Peeters' spokesman said.

Sweden's Volvo, whose ailing U.S. parent has said it wants to sell the business, has applied for state guarantees for 5 billion crowns ($670 million) of loans from the European Investment Bank (EIB), the European Union's financing arm.

In March, the EIB granted Volvo a loan of 200 million euros to develop new environmentally friendly vehicles, provided the carmaker could secure loan guarantees.

Talks between Volvo and the Swedish government over such a guarantee were put on hold earlier this month. Volvo said this was due to Ford's strategic review and expressed disappointment, noting other European carmakers had received loan guarantees.

The Flemish government said it needed to be sure that Volvo had a credible business plan and that the carmaker saw a future for its plant in Belgium and for the workers there. It also wanted assurances in the event that Volvo was sold.

Volvo's plant in Ghent is its largest outside Sweden, building some 240,000 cars per year and employing around 4,500 workers, according to the plant's website. (Reporting by Philip Blenkinsop, editing by Will Waterman) ($1=.7145 Euro) ($1=7.464 Swedish crown)