June 24, 2024

Chinese Company Rides to Saab’s Rescue, Again

PARIS — In the latest twist in its frantic struggle for survival, the Swedish company Saab Automobile signed a tentative financing and import deal Monday with the largest publicly traded car distributor in China.

Saab’s parent, the Dutch sports car maker Spyker Cars, and Pang Da Automobile Trade, which operates more than 1,100 dealerships across China, signed the memorandum of understanding in Beijing. The deal came a week after a tie-up between Saab and another potential Chinese partner collapsed.

Under the terms of the new deal, Pang Da would pay €30 million, or $42 million, for an unspecified number of Saab cars, and €15 million for additional Saab cars within 30 days, “subject to certain circumstances.” Pang Da would also pay €65 million for a 24 percent equity stake in Spyker, gaining the right to a voice in Spyker and Saab management.

The €65 million would “secure Saab Automobile’s medium-term funding,” the companies said in a statement.

The deal also calls for the companies to create joint ventures to make and distribute cars in China, both under the Saab brand and a new brand to be announced.

“This is a tremendous boost for Saab, because it means we can sell imported Saabs into China,” Victor R. Muller, who is chief executive of both Spyker and Saab, said during a conference call.

Saab, which Spyker bought from General Motors in 2010, has so far lost six weeks of production after suppliers stopped extending credit in early April amid a funding crunch. Even with the new arrangement, Mr. Muller said, Saab cannot be certain when work at its factory in Trollhattan, Sweden, will resume.

The emergence of another Chinese company to try to take a stake in Saab underlines the intense interest among many Chinese companies in acquiring global automotive brands, even as the government pushes for consolidation of the industry into six to 10 large manufacturers.

This month, Saab announced a deal with Hawtai Motor Group that would have provided €120 million in new financing. But that deal collapsed last week after it became clear the Chinese company would be unable to obtain official authorization in time to help Saab, Mr. Muller said.

Richard Zhang, a vice president of Hawtai, disputed that account last week in a statement, saying with little elaboration that it had been “commercial and economic realities, not lack of government approval, which forced the termination” of the arrangement with Saab.

“We have seen Spyker’s announcement on the M.O.U. they signed with Pang Da,” Hawtai said in a statement Monday. “We continue to monitor the situation and will consider opportunities that developments present.”

Mr. Muller said Pang Da could provide financing in the normal course of business and would not need regulatory approval. He said Pang Da, which sold 470,000 cars in China last year, was actually a better partner because of its distribution capabilities.

But Michael Dunne, the president of Dunne Co., a Hong Kong auto consulting firm, expressed surprise that Pang Da was moving so quickly after an initial public offering last month. The gross proceeds of the offering before fees totaled 6.3 billion renminbi, or $970 million, which shrank to 6.04 billion renminbi after expenses.

“This all looks so sudden — and highly ambitious,” he wrote in an e-mail. “Pang Da, a distribution company, went public and raised $1 billion just three weeks ago. Now, it’s preparing to form not one but two manufacturing joint ventures, one of which will be an indigenous brand venture.”

Under China’s foreign exchange rules, the government must approve any large conversion of renminbi to foreign currency for an overseas corporate acquisition. The deal also remains subject to the approval of the European Investment Bank and the Swedish authorities. General Motors, which holds Saab preference shares, also has a vote on the plans.

Another would-be Saab investor, the Russian financier Vladimir A. Antonov, is still waiting for the approval of the Swedish government and the European Investment Bank, Mr. Muller said.

Keith Bradsher contributed reporting from Hong Kong.

Article source: http://feeds.nytimes.com/click.phdo?i=4d39f2bb4b4930bd660fcfe8fdba1191

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