Sweden

Swedish media warns that Saab Automobile is close to bankruptcy, a day after luxury carmaker Koenigsegg abandoned its bid to buy the group from its US parent General Motors, The Swedish Wire reported. "The Death Knell," financial daily Dagens Industri headlined on its front page, while the country's leading newspaper Dagens Nyheter blazed "It's Over Now." In an analysis piece, conservative daily Svenska Dagbladet said "everything was pointing to the closure of Saab," adding it was "unlikely" a new buyer would turn up.

Latvia's halting austerity program and its proposal to modify mortgages are causing "another wave of distrust" to roll over the Baltic nation, the central bank said Wednesday, issuing a warning for the country hit hardest by economic strains across Europe, The Wall Street Journal reported. The criticism came as a government bond auction failed to attract buyers, and worries about the Latvian economy weighed on the currencies of Sweden -- whose banks are Latvia's major lenders -- and other countries.

Denmark's economy pushed deeper into recession in the second quarter, with data showing a much larger-than-expected decline in gross domestic product, The Wall Street Journal reported. Danish GDP fell 2.6% on a seasonally adjusted quarterly basis and was a record 7.2% lower from a year earlier, Statistics Denmark said Wednesday. Economists had forecast a decline of 1.4% and 5.2%, respectively. The figures mark the fourth straight quarter in which output has fallen in Denmark.

The European Union wants to make limits on bankers' pay a key issue when leaders from the Group of 20 largest economies meet in Pittsburgh later this month, The Wall Street Journal reported. Several of the bloc's finance ministers, in Brussels for a special meeting to prepare a common negotiating stance for the G-20 summit, cited pay curbs as their main priority. "We have to stop the restarting of the bonus culture," Swedish Finance Minister Anders Borg told journalists before the ministers' meeting.

Saab has exited the Swedish equivalent of Chapter 11 bankruptcy, filing papers with a district court saying that it would not seek to extend its so-called reconstruction period. But the carmaker’s future is still uncertain as the government has refused the idea of a loan to help wrap up the sale of the company, The New York Times DealBook blog reported. The filing Wednesday, just a day after General Motors formally agreed to sell the troubled carmaker to a much smaller Swedish automaker, Koenigsegg, ending six months of reorganization that could bring a fresh start for Saab.

Nortel Networks, the bankrupt Canadian maker of telecommunications equipment, said over the weekend that Ericsson of Sweden had won an auction of its wireless technologies unit with an offer of $1.13 billion, thwarting a bid by a rival, Nokia Siemens Networks, The New York Times reported. Last month, Nortel signed a deal to sell the division, which is profitable, to Nokia Siemens for $650 million. A bank owned by the Canadian government also agreed to provide $300 million in financing for the deal.

A senior Swedish government official said on Tuesday it remained unclear whether Sweden would need to make guarantees for European Investment Bank financing in support of a deal to sell General Motors unit Saab. GM Europe said earlier on Tuesday a preliminary agreement had been reached to sell Saab to sports car maker Koenigsegg. "We do not yet know if Koenigsegg group will need loan guarantees or not," Joran Hagglund, state secretary for Sweden's industry ministry, told Reuters. GM Europe did not disclose terms but said the sale involved expected financing that would be guaranteed by Sweden.

Swedish car maker Koenigsegg Group AB has reached an agreement to acquire General Motors Corp.'s Saab Automobile AB unit for an undisclosed sum, the companies said Tuesday. Saab was granted creditor protection in Sweden Feb. 20 and GM, also in bankruptcy protection, said it wanted to offload the unit by the year's end. The sale, expected to close by the end of the third quarter of this year, includes an expected $600 million funding commitment from the European Investment Bank guaranteed by the Swedish government, the companies said in a statement.

General Motors Corp.'s Saab Automobile AG Friday won more time to pursue a likely sale and avoid bankruptcy after a local Swedish court granted an extension to the struggling Swedish automaker's creditor protection period. Vanersborg District Court in southwestern Sweden extended the reorganization period for three months until Aug. 20. Loss-making Saab was granted protection from creditors in February, similar to Chapter 11 protection in the U.S., with the aim of reorganizing itself in a bid to become profitable.

Saab Automobile, which filed for bankruptcy protection last month, will cut 750 jobs at its main factory in southern Sweden in response to falling demand, Bloomberg reported. About 650 of the affected workers are tied to production, while the remaining 100 jobs are administrative positions, Saab spokeswoman Gunilla Gustavs said by telephone from Gothenburg today. Saab has about 4,100 workers, most of them in Trollhaettan, where Saab makes the 9-3 and 9-5 models.