European Investment Bank stands accused of endangering Saab's survival

Cash-strapped car maker Saab plans to continue talks this week to secure funding amid concern that the terms attached to a deal would be too onerous for the venerable Swedish brand, which was rescued last year by Dutch sports car maker Spyker.

Saab got a conditional "yes" from the European Investment Bank (EIB) on a deal aimed at giving the car maker a cash lifeline but has branded the EIB's terms as "tough" and remains unsure when it will have enough cash to get production going again.

Spokesman Eric Geers said: "We are doing whatever we can to try and secure funding. There are lots of discussions with various parties and stakeholders and those will continue this week."

Saab ran into a cash crunch in its first year of ownership by Spyker after its 2010 sales fell short of forecasts.

Its factory in south-west Sweden has been shut for more than two weeks after it failed to pay some suppliers.

Under the new deal, Russian financier Vladimir Antonov - who also eventually wants to become a shareholder in Saab - is to buy Saab's plant and other property and lease it back to the car maker. Saab had been hoping the EIB would sign off quickly on the liquidity injection after the Swedish state backed the agreement last week.

But there are concerns that the ailing car maker might not be able to meet the conditions set in the draft letter from the EIB.

Lars Carlstrom, a representative for Antonov in Sweden, said one of the conditions was that Saab repay money it had already borrowed within 90 days of the sale and leaseback deal being carried out.

"Saab cannot live with that," he said. "If you agree to the EIB conditions, you need to close the business. It is ridiculous, a ridiculous letter from the EIB which totally kills Saab's business."