GM's Saab given more time to restructure

STOCKHOLM/LONDON (Reuters) - A local Swedish court on Friday granted General Motors' GM.N loss-making unit Saab a further extension to its protection from creditors, giving it more time to restructure.

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The Swedish carmaker, which first sought protection from creditors in February, was granted an extension until August 20 allowing it to line up a new owner and restructure its business.

“The business reorganisation of Saab Automobile Aktiebolag is authorized to continue, though at most to August 20, 2009,” the court in Vanersborg, southwest Sweden, said in a document obtained by Reuters.

The extension came as General Motors, the No.1 U.S. automaker, moved closer to filing for bankruptcy.

Saab, which was put up for sale by its ailing parent earlier this year, said on Thursday that Saab and GM would present a preferred candidate out of three undisclosed remaining bidders within the coming weeks.

Swedish business daily Dagens Industri late on Thursday reported that the two frontrunners were Swedish luxury carmaker Koenigsegg and U.S. financier Ira Rennert and his Renco Group, with Italy's Fiat FIA.MI as the third suitor, citing undisclosed sources.

A person familiar with the matter said GM had grown worried about Saab technology leaving Sweden, and had recently effectively barred Chinese companies from bidding, shutting out one prospective suitor.

The person declined to identify the Chinese bidder but said it was not Geely 0175.HK -- which had also shown some initial interest in Saab.

Fiat Chief Executive Sergio Marchionne said on Friday Fiat would still be interested in Saab even if GM’s Opel falls out of play.

Saab spokeswoman Gunilla Gustavs on Friday declined to comment on the Dagens Industri report, but said she was satisfied with the court’s decision to extend the reorganisation period.

“This means we can proceed to cope with the work at hand,” she said, and repeated Saab was not worried that the possibility of a bankruptcy filing by its owner GM would disrupted its sale process. Saab could not be reached for further comment later in the day.

Reporting by Victoria Klesty in Stockholm and Quentin Webb in London; Editing by Erica Billingham, Dave Zimmerman