After a difficult couple of months, Saab Automobile AB finally resumed output at its Trollhattan plant in Sweden, just in time for a visit by Chinese partner Pang Da. Saab, which was bought by Dutch car company Spyker Cars NV from GM just last year, was facing collapse having run out of money to pay suppliers, forcing a halt in production at the beginning of April this year.
Thanks to a Y1bn (€110m) deal announced earlier this month between Spyker and Pang Da Automobile Trade Co, which included an immediate cash injection, Saab was is able to return to business as usual with a scheduled to return to its normal 218-car output from 6 June.
However, this deal was quickly followed by the news that Pang Da's 24% stake in the troubled car maker may be eclipsed by Zhejiang Youngman Lotus Automobile Co, which has signed an non-bindingheads of agreement to by a 29.9% share of the business, taking the total JV purchases to an estimated Y2.3bn (€245m). The Youngman deal is, like the Pang Da bid, also dependent on approval from the Swedish and Chinese authorities.
The Pang Da deal could not have come at a better time for Saab after a previous €150 million deal with Chinese motor producer Hawtai to buy up a 29.9 percent stake in the company fell through in May. This quickly foundered after Hawtai was unable to obtain all the necessary consents from Chinese authorities to complete the acquisition.
On his first visit to the plant, Pang Da's Pang Qinghua was quoted by a local news agency as being 'very impressed' with production as he and Spyker chief Victor Muller watched the first two cars, a 9-5 Aero XWD and 9-3 convertible, come off the assembly line. The total number of Saab's worldwide orders, which include those of its new Chinese partner, stands at 8,100.
Even though an advance payment of €30 million (equivalent to 278 million yuan) was given to the Dutch-owned company, in exchange for Saab cars to be sold in China, Pang Da is still awaiting Beijing's blessing for its planned rescue of Saab. The National Development and Reform Commission have yet to approve the deal, which will be worth over a billion yuan. Saab's future, therefore, is still uncertain, as the commission is not afraid of saying 'No', as it did when it vetoed Sichuan's Tengzhong bid for GM's Hummer brand in 2010.
Saab Vice President Gunnar Brunius admits that there will be some issues during the early phases of production, but is confident the company will receive the approvals it needs from Swedish authorities and the European Investment Bank.
Published 16th June, 2011
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