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In a clear indication of confidence that Saab Automobile AB is very close to finding a new owner to take it over from General Motors Corp. (GM), the Swedish government said Thursday that it will start negotiating a loan guarantee with the Swedish car maker.

The government said it has decided to let its National Debt Office start formal discussions about the state guaranteeing a EUR500 million loan that Saab has applied for with the European Investment Bank.

"We have said all the time that when there is a new owner for Saab the debt office can start negotiations about loan guarantees, if those are needed," Joran Hagglund, who is the government's main liaison with the auto industry, said in a statement. "With today's decision we are well-prepared for this," he added.

Saab hasn't yet announced who may buy it from GM. Saab spokeswoman Gunilla Gustavs said an announcement on who the primary candidate is "could come either very soon or it may take some time."

The final candidates are reportedly The Renco Group Inc., a private holding company; Swedish sports car maker Koenigsegg; and Merbanco Inc., a Wyoming-based private investment group.

The Swedish government is playing a key role in determining Saab's future.

The EIB loan is a cornerstone in Saab's plan for signing a final agreement with a new owner and returning to profitability. The EIB won't lend Saab the money without Sweden's guarantee. The government, in turn, has said it won't guarantee the loan before Saab presents a new owner that the government deems viable.

Industry Minister Maud Olofsson told Dow Jones Newswires Tuesday it was "very difficult to say" whether Saab would succeed in finding a new owner seen as stable enough for the government.

Separately, Saab's Gustavs said her company is "very confident" that a Swedish court next week will approve Saab's proposal for settling its debts with hundreds of creditors.

Saab owes about 10.5 billion Swedish kronor ($1.36 billion) to about 600 creditors, and the company has proposed to settle the debts by paying 25% of what was owed.

Some 90% of the debt, almost SEK10 billion, is owed to GM, partly because the Detroit-based auto maker has paid several of Saab's suppliers. Gustavs said that GM and most other creditors support the accord plan.

Company Web site: www.saab.com, www.gm.com

-By Ola Kinnander and Gustav Sandstrom, Dow Jones Newswires; +46-8-5451-3097; ola.kinnander@dowjones.com