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Saab CEO says could boost output with bridge loan

* Carmaker still expects to have sufficient liquidity

* In funding talks with EIB

VISBY, Sweden, June 30 (Reuters) - Saab Automobile could increase production to meet higher demand if it secured bridge financing from the government, the struggling Swedish carmaker’s chief executive said on Tuesday.

Jan Ake Jonsson also told journalists on the sidelines of a conference on the island of Gotland the loss-making unit of bankrupt U.S. carmaker General Motors GMGMQ.PK had enough liquidity to last it through the grace period under creditor protection granted it by a Swedish court.

Niche sportscar maker Koenigsegg earlier this month agreed a preliminary deal to take over Saab, backed by Norwegian and U.S. investors. [ID:LG827751]

“We are discussing bridge loans,” Jonsson said.

“If we were to get that kind of financing that would mean we could increase production. We have the demand and we would of course have to rehire a number of individuals.”

Financing for the Koenigsegg deal included an expected $600 million in loans from the European Investment Bank (EIB) guaranteed by the Swedish state, which so far has been reluctant to extend aid to what is an iconic Swedish brand.

“We are in intensive discussions with the EIB about financing,” Jonsson said.

“Depending on the time horizon, we will take initiatives to hold on to our money so that we manage until the financing becomes clear, so I feel pretty calm on this issue.”

Saab has said it needs $1 billion to help it restructure and launch new models. Jonsson said that if negotiations with the EIB proved lengthy, the company would need to adjust its costs.

“It would mean for example that we can’t raise production,” he added.

Swedish Industry Minister Maud Olofsson said in a Reuters interview last week that the government remained in the dark on how much Koenigsegg and its financial backers would invest in Saab, and that state guarantees might not be needed. [ID:nLP507788]

While holding out the prospect of obtaining loan guarantees, the Swedish government said in May Saab might also qualify for a bridging loan from the state if that proved necessary to smooth the transition to a new owner. [ID:nLK572443]

Reporting by Johan Sennero; writing by Niklas Pollard; editing by John Stonestreet

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