A Swedish court approved an extension to Saab Automobile AB's reconstruction period Friday, as the Swedish carmaker attempts to avoid bankruptcy as it breaks free from current owner General Motors Corp. (GM) of the U.S.

Vanersborg District Court in southwestern Sweden extended the reorganization period for three months until Aug. 20.

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.

-By Ola Kinnander and Ian Edmondson, Dow Jones Newswires; +46-8-5451-3094; ian.edmondson@dowjones.com