February 25, 2024

Saab Gets New Lifeline From China

PARIS — Saab Automobile was thrown a lifeline in a deal announced Tuesday through which a Beijing-based company will take a stake in the struggling Swedish carmaker, provide a loan to help it restart production, and open access to the booming Chinese market.

Hawtai Motor will provide €150 million, or $223 million, in new financing, including €120 million for a 29.9 percent equity stake in the Dutch company Spyker Cars, which bought Saab from General Motors last year. In addition, Hawtai will provide a €30 million convertible loan with a six-month maturity at 7 percent. The deal also includes joint ventures in manufacturing, technology and distribution in China.

“I would hope that all things being equal, we have seen the last of the growing pains,” Victor R. Muller, the Spyker chief executive and chairman of Saab Automobile, said on a conference call from Beijing. China will soon be “our second home market.”

The agreement comes after increasingly fraught efforts by Saab in recent weeks to remain afloat as it drained its cash reserves and left suppliers in Sweden unpaid. Production has been halted since early April; Mr. Muller said operations should be restarted early next week.

On Monday, Spyker said that it had secured short-term loans of €59.1 million. That includes a €30 million, six-month convertible loan from Gemini Investment Fund, one of Spyker’s shareholders, and an additional €29.1 million from a loan made by the European Investment Bank.

Mr. Muller said that he still hoped that a Russian investor, Vladimir A. Antonov, will again become a Spyker shareholder in the future.

When G.M. sold Saab to Spyker early last year, it blocked Mr. Antonov, who had owned part of Spyker, from participating in the deal amid allegations of suspicious financial dealings.

Last week the Swedish National Debt Office, which guarantees the loan facility from the E.I.B., cleared Mr. Antonov to reinvest in the company. “He’s as clean as a baby,” Mr. Muller said. G.M. said it had reached a “tentative agreement” to the same effect, subject to conditions, although the E.I.B. has yet to confirm whether it will follow suit.

With the Chinese deal, Spyker no longer urgently needs to raise cash by selling property to Mr. Antonov, Mr. Muller said.

But assuming Mr. Antonov is given final clearance, he would then be free to invest in the company, and buy shares from existing shareholders, Mr. Muller said. He added: “We’ll see how it pans out.”

Through the deal, Saab’s next-generation 9-3 will be made under license in China from 2013, while Saab will also export to China from its plant in Trollhattan, Sweden. Saab is contractually barred from allowing its 9-4X and 9-5 models, which were developed with G.M., from being produced in China.

The partnership with Hawtai allows Saab “to continue executing its business plan,” after securing the required mid-term financing, Mr. Muller said. In addition, he said, “it allows Saab Automobile to enter the Chinese car market and establish a technology partnership with a strong Chinese manufacturer.”

Hawtai, which is privately owned, was founded in 2000. It has two plants in China and an annual production capacity of 350,000 vehicles; it also makes diesel engines and transmission systems. It is ramping up capacity and says it plans to produce 1 million vehicles a year by 2015.

In a statement, Richard Zhang, vice president of Hawtai, described Saab as an “iconic” brand and said the deal would give his company access to innovative technology and an international network, which would otherwise “have taken us decades to build.”

He added that Hawtai was committed “to the future of Saab Automobile as a premium European car manufacturer.”

Hawtai previously made cars in a venture with Hyundai of Korea and from 2007 it started building under its own badge. According to Chinese news reports, it has also has mining rights at coal mines in Mongolia and is in the process of investing in Bank of Beijing. A Hawtai representative will take a seat on Spyker’s board, which will hence increase in size to four members from three.

The deal marks the second time that a Chinese group has bailed out a Swedish carmaker. Zhejiang Geely Holding, China’s largest privately run automaker, agreed last year to buy Ford Motor’s Volvo unit.

General Motors sold Saab to Spyker in 2010 for $74 million in cash and it also received Saab preference shares with a face value of $326 million, giving it a continuing voice in the Swedish automaker’s future. Spyker said that the Chinese investment did not need to be approved by G.M.

The latest deal is subject to approval by Chinese government agencies, the European Investment Bank and the Swedish National Debt Office.

In Amsterdam, Spyker shares rose 16.3 percent to €4.93.

Saab employs 3,800 people, mostly at the Trollhattan plant. Several thousand jobs at supply companies also depend on Saab.

Article source: http://feeds.nytimes.com/click.phdo?i=ca2b6a4cef2127dc2c7c23764b24d88f

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