Saab strikes deal with another Chinese company

3:57 min

Troubled car manufacturer Saab Automobile’s owner, Dutch Spyker Cars, has signed a memorandum of understanding with another Chinese company, Pang Da Automobile, according to a press release.

Pang Da is China’s largest distributor and as a first step in the agreement the company will pay 30 million euro, or $42.2 million for the right to distribute and manufacture certain Saab models.

After that Pang Da will pay another 15 million euro, $21 million, within 30 days if certain requirements have been met. In addition, Pang Da, has bought 24 percent of shares in Spyker Cars, at a value of more than $91 million.

Despite that, a similar deal with another Chinese company, Hawtai Motor Group, fell through that the last minute the announcement received positive reactions. Spyker Cars shares rose by 10 percent on the Amsterdam stock exchange, news agency TT reports.

The new cash injection of 65 million euro will, according to Spyker, ensure the financial stability of Saab for a while to come.

But before the deal can go through it needs to be approved by Chinese authorities, the European Investment Bank, Saab’s former owners General Motors and the Swedish National Debt Office.

But Saab’s CEO Victor Muller told TV 4 news shortly after the announcement that he was more hopeful that this deal would go through, and pointed out that the first payment does not need the approval of the EIB, GM or the Swedish and Chinese governments.  

“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," he said.