Saab and its Dutch owner Spyker have announced new rescue funding through a venture with Chinese firm Pang Da Automobile, just days after another Chinese rescue deal collapsed.
Spyker described Pang Da as “China's largest publicly traded automobile distributor with more than 1100 dealers nationwide.”
Spyker said that under a draft agreement covering manufacturing and distribution, Pang Da Automobile would inject €65 million (R645 million) into Spyker in exchange for 24 percent of the company.
The cash “will secure Saab automobile's medium term funding,” Spyker said in a statement.
Pang Da will initially transfer €30 million (R298 million) to purchase Saab cars and another €15 million (R149 million) to purchase more vehicles within 30 days of the initial purchase.
“The memorandum of understanding includes a strategic alliance consisting of a 50-50 distribution joint venture,” it explained.
The deal also covers “a manufacturing joint venture (MJV) for Saab branded vehicles as well as for an MJV-owned brand (the so-called 'child brand') in China,” the statement said.
The Chinese company will also have the right to one seat on the board of Saab or Spyker.
Spyker head Victor Muller said: “Both parties are confident that this partnership allows Saab Automobile and Pang Da to create a strong business, initially in the distribution and subsequently in the manufacturing of Saab vehicles in China.”
Pang Da chief executive Pang Qinghua said: “Having just gone public ourselves three weeks ago, we are delighted to have the opportunity to become a substantial shareholder in Spyker, Saab's parent.”
He said: “We very much look forward to collaborating with Saab's management to successfully enter our promising home market.”
Monday's announcement comes less than a week after Spyker said a €150 million (R1.5 billion) deal with Chinese automaker Hawtai had fallen through, casting new doubt on the future of Saab.
The iconic Swedish brand, which employs 3800 people in the southwestern Swedish town of Trollheattan, was rescued at the last minute in early 2010 when tiny Dutch brand Spyker bought it for $400 million (R1.6 billion) from US auto giant General Motors.
It was forced to halt production “until further notice” in April as suppliers stopped deliveries over unpaid bills.
A representative of suppliers estimated Saab's debt to suppliers at about €100 million (R990 million). - AFP