Saab Hangs On As New China Saviour Emerges
Production Remains Paralysed As Suppliers Await Finance Deal
Pangda Replaces Hawtai With Plan To Rescue Ailing Swede
The production line at Saab has been stopped since last month and questions over the company’s future are mounting as the latest saviour, Pangda Automobile Trade Co Ltd of China, apparently made an offer for all of the Swedish company and 24 per cent of Spyker.
Dutch sports car maker Spyker, which owns Saab, made the announcement on May 16.
Pangda has agreed to buy Saab for up to €45 million and take 24 per cent of Spyker for a total of €65 million. No more details were available.
Pangda is a car dealership which raised nearly $1 billion in an initial public offering last month. Spyker said Pangda is the largest automobile distributor in China.
Spyker warned though that the deal requires consent from some Chinese government agencies, the European Investment Bank (EIB), General Motors and the Swedish National Debt Office.
Last week Spyker announced that little known Hawtai Motor Group Co had purchased 29.9 per cent of Saab for €120 million. But a few days later the deal unravelled when it transpired that Hawtai failed to convince China government authorities that the deal made sense. A couple of days after that deal collapsed, Hawtai said this was because of what it called “commercial and economic realities”, not lack of government approval.
Meanwhile, the Saab production line remains closed after it shut down when some suppliers stopped deliveries because of unpaid bills. Spyker chairman Victor Muller had hoped the deal with Hawtai might bring in the necessary finance to convince suppliers to resume deliveries. Spyker has also been talking to the EIB about finance, and the Swedish government over a proposed investment by Russian financier Vladimir Antonov.
IHS Automotive analyst Ian Fletcher said before the news about Pangda’s bid that Saab’s future is on the line.
“Saab remains in dire need of an influx of cash from somewhere. Gemini Investment Fund is said to be prepared to give €30 million of short-term financing in return for what could be a larger stake in the business, although this requires the approval of Sweden’s National Debt Office, the EIB and no doubt GM as well,” Fletcher said.
GM still owns some Saab technology.
“Longer-term investment from Antonov could also still be in the running if he manages to surmount the same regulatory hurdles,” Fletcher said.
Neil Winton – May 15, 2011
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