Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade agreed to pay 100 million euros, or $140 million, for Saab and its British unit, according to Saab’s parent company, Swedish Automobile.
“We had been struggling for the last six or seven months, to the extent that many people had given up on us,” Victor R. Muller, the Dutch entrepreneur behind Spyker cars and Swedish Automobile, said in a conference call with journalists.
With the new owners, he said, “there will be stability, there will be funds and there will be clarity for the future of our business.”
It was the second time in two years that Chinese investors had come to the aid of the Swedish auto industry. Last year, the Zhejiang Geely Holding Group paid Ford Motor $1.8 billion for Volvo.
Martin Skold, a scholar at the Stockholm School of Economics who follows the auto industry, said it was too early to say Saab was saved.
“Saab is in great need of an enormous amount of money,” he said, estimating that it would take at least $800 million and possibly as much as $1.5 billion to turn it around. “We’ll have to wait to see how much the Chinese are willing to invest in it,” he added.
Mr. Muller acquired Saab last year from General Motors, which was then recovering from its own bankruptcy. But Saab, which has a long-established base of dedicated customers, has so far not been able to right itself.
The Chinese companies agreed in the spring to invest a combined 245 million euros ($347 million) for a 54 percent stake after Saab’s main factory in Trollhattan, Sweden, shut down over unpaid bills. But negotiations dragged on, leaving Saab in an increasingly precarious state.
With employees unpaid for months, Saab’s unions began legal proceedings in September that could have put the company into bankruptcy. Mr. Muller sought and received court protection from creditors to reorganize and complete the Chinese investments.
Within the last week, it appeared that the final countdown had begun, when the administrator in charge of the voluntary reorganization, Guy Lofalk, recommended to the court overseeing the case that the effort be halted.
Saab said Friday that Mr. Lofalk had “withdrawn his application to exit reorganization.” The agreement with the two Chinese companies is valid until Nov. 15, Saab said, provided the reorganization continues. Mr. Lofalk did not immediately reply to a request for comment.
Mr. Muller, who owns 30 percent of Swedish Automobile, declined to detail how his involvement with Saab, including the sale to the Chinese, had affected his personal wealth. But he said: “You can rest assured that I lost a lot of money.”
He said Youngman and Pang Da had “expressed a desire for me to remain involved,” but he said whatever role he played in the future would “absolutely be up to the new owners.” The Chinese companies have demonstrated that they have the resources to invest up to 500 million euros ($708 million) in Saab, he said, and are planning to resume production at the Trollhattan plant as well as in China, “which will become the second home market for Saab.”
The deal first requires the approval of the authorities in Beijing, a requirement that put an end to the efforts of a previous would-be rescuer, the Hawtai Motor Group. It must also pass muster with the European Investment Bank and the Swedish government, both of which have lent money to Saab, as well as G.M., which has lingering links to Saab, including intellectual property and preferred shares with a face value of $326 million.
James R. Cain, a G.M. spokesman, said it was “impossible to say anything constructive” because G.M. had not been briefed on the agreement and was waiting for information.
But the big question now lies in whether Chinese officials, silent on the deal so far, have secretly blessed the offer by the two Chinese companies and plan to give it regulatory approval.
“Beijing does not like to endorse companies that fly outside their radar screen,” said Michael Dunne, an independent auto analyst specializing in Asian manufacturers. “We’ll very quickly find out whether Youngman and Pang Da have enough political muscle to get this deal done.”
A woman answering the phone at the general manager’s office of Pang Da confirmed Friday that an agreement had been reached with Saab, but she had no comment on the details. A woman answering the phone at Youngman said that she had no information and that all senior people in the office were traveling and could not be reached for comment.
Keith Bradsher and Hilda Wang contributed reporting from Hong Kong.
Article source: http://www.nytimes.com/2011/10/29/business/global/chinese-carmakers-to-buy-saab-pulling-it-back-from-the-brink.html?partner=rss&emc=rss