Sweden's Saab heads for Chinese owners after rescue offer
By Veronica Ek and Mia Shanley
STOCKHOLM (Reuters) - Struggling Saab is set to follow in fellow Swedish car maker Volvo's footsteps, heading for Chinese ownership under a planned 100 million euro ($141.4 million) purchase by Pang Da Automobile Trade Co 601258.SS and Zhejiang Youngman Lotus Automobile Co.
Saab has not produced cars for months and has lurched from one cash crisis to another to find itself under court protection from creditors to stop bankruptcy filings, a process which was in danger of collapsing before the new Chinese agreement.
"After the better part of seven months of agony for the company, we have come to a point where we can proudly say that we made it," said Victor Muller, chief executive of current Saab owner Swedish Automobile. SWAN.AS
He spoke after Swedish Automobile announced a memorandum of understanding under which the two Chinese companies -- auto maker Youngman and dealer Pang Da -- are to pay 100 million euros to buy Saab.
He said eventual investments would be double the 245 million euros promised under an earlier deal with the Chinese companies.
If successful, it would be the second Chinese purchase of a Swedish car company in just over a year after Geely bought Volvo in August 2010 from Ford (F.N: Quote). Swedish Automobile, then called Spyker, itself rescued Saab from closure by former owner General Motors (GM.N: Quote) in early 2010.
Muller has orchestrated a string of deals over the last few months to keep Saab afloat after it had to close its production line. The latest news came after a source told Reuters a new Chinese deal was close.
In a reminder that other deals and promises of funding for Saab have fallen through, Swedish Automobile said the new agreement was valid to November 15 and that final terms were still being worked on, including long-term financing. Continued...