Saab teams up with new Chinese partner

[May 16, 2011]  STOCKHOLM (AP) -- Saab owner Spyker Cars NV has signed a tentative deal with Chinese company Pang Da for the distribution of Saab cars in China, a week after a similar agreement with another Chinese auto company collapsed, company officials said Monday.

The Netherlands-based Spyker Cars said Pang Da will inject euro65 million ($92 million) for a 24 percent stake in Spyker, and the two will form a 50/50 joint venture for the distribution and potential manufacturing of Saab cars in China.

The deal also means Pang Da will buy Saab vehicles for euro30 million. It is also expected to pay another euro15 million for more cars within 30 days.

Spyker has been scrambling to find cash for Saab, which was forced to stop production at its plant in Sweden last month.

A previous financing agreement with Hawtai collapsed after the Chinese company failed to obtain the necessary consents.

Spyker said the Pang Da deal is also subject to "agreement on definitive transaction documents and certain conditions," including consents from Chinese government agencies, the European Investment Bank, previous Saab owner General Motors Corp. and the Swedish National Debt Office.

Spyker said the money from Pang Da would secure its medium term funding and allow it to reach the agreements about payments and delivery terms with suppliers, needed to restart production.

"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," Spyker CEO Victor Muller said in a statement, adding he would work hard to complete the agreement.

"This partnership allows us not only to distribute Saab, the iconic European premium brand, in China but also to set up a manufacturing joint venture which will further enhance the competitive position of the Saab brand in China," Pang Da CEO Pang Qinghua said.

Pang Da, based in Tangshan, in northern China's Hebei province, distributes dozens of car brands in 23 Chinese provinces and cities, including Audi, Volkswagen, Mazda, Honda, Subaru and Chery.

In 2010, it reported a net profit increase of 22 percent to 1.24 billion yuan ($190.8 million) after selling 470,000 vehicles.

[Associated Press; By MALIN RISING]

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