July 15, 2024

Saab Signs Up Another Chinese Investor

PARIS — In the latest twist on its road to recovery, Saab Automobile announced a deal Monday with two Chinese companies that will take stakes in the Swedish automaker and make and sell its cars in the world’s most populous country.

Spyker Cars, which owns Saab Automobile, said that it had signed a memorandum of understanding to sell a 29.9 percent stake in Spyker to Zhejiang Youngman Lotus Automobile for €136 million, or $195 million.

Taken with the announcement last month of a financing and import deal with Pang Da Automobile Trade, also of China, Spyker has now negotiated what it calls a “tripartite” alliance to enter the Chinese market.

The alliance will give Saab a distribution joint venture and a manufacturing joint venture for Saab-branded vehicles, as well as other cars made under a new brand to be owned by the venture.

It brings in a total equity participation of €245 million — €136 million from Youngman plus €109 million from Pang Da, which will have a 24 percent stake in Spyker. Previously, Pang Da had agreed to invest €65 million.

The agreement is nonbinding and the transactions are subject to approval by investors in the companies, the Chinese authorities, the European Investment Bank, the Swedish government and national debt office, and General Motors.

Since buying Saab from General Motors in 2010, Spyker, a small Dutch manufacturer of sports cars, has faced pressing financial issues that have repeatedly interrupted production at its factory in Trollhattan, Sweden.

Last month, Saab announced a deal with Hawtai Motor Group of China that would have provided €120 million in new financing.

But that plan collapsed soon afterward, when it became clear that the Chinese company would be unable to obtain official authorization in time to help Saab.

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 to enter the capital of the group.

Last week, Saab had to halt production again, citing “negotiations with a number of suppliers on payment and delivery terms.”

The automaker had only just restarted production in late May after an initial shutdown from April through most of May amid a failure to pay suppliers.

Spyker’s chief executive, Victor R. Muller, has said that he expects the latest interruption to last days rather than weeks.

Under the latest deal, Youngman and Saab will both hold 45 percent of the shares in the manufacturing venture and Pang Da will take the remaining 10 percent. Youngman is not associated with the sports car maker Lotus Cars.

In the distribution venture, Youngman and Saab will each take 33 percent and Pang Da will hold 34 percent.

Youngman and Pang Da will each have the right to nominate as many as two members of Spyker’s supervisory board, which currently comprises three members but is not limited in size.

“I am very confident that based on their experience, proven skills, their ability to move quickly and their financial strength, we found the partners that are best suited to fully explore Saab’s potential in China,” Mr. Muller said.

The deal “significantly strengthens Saab’s financial position and would secure the mid- and long-term financing of Saab Automobile,” he said.

Pang Qinghua, chief executive of Pang Da, said Saab’s current and future lineup was “very well suited to the Chinese market.”

In addition, he said, “we are particularly impressed by their design, engineering and manufacturing skills.”

Pang Qingnian, chief executive of Youngman, said his company had “been in contact with Saab Automobile for quite some time” and added that “Saab as a premium European brand appeals strongly to the taste and preferences of the Chinese customer.”

Saab is also working on more short-term funding solutions, including selling and leasing back property.

In a separate announcement Monday, Spyker said that those discussions were “still ongoing” and that an announcement on the sale of Saab property was expected “shortly.”

Article source: http://www.nytimes.com/2011/06/14/business/global/14saab.html?partner=rss&emc=rss

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