Saab signs fresh deal with Chinese firm Pangda

By Paul Bond

17th May 2011

Saab has taken another step towards securing its long-term future by signing a deal with major Chinese distributor Pangda, just a week after negotiations with Hawtai fell through.

Victor Muller, CEO of Spyker, who own Saab, told journalists on Monday that Pangda has agreed to purchase Saab in two stages - starting with an emergency cash injection of €30m to get the (currently closed) factory  moving again and pay-off its indebted suppliers.

Essentially this payment is a massive pre-order for cars that Pangda can sell and distribute in China, and Swedish newspapers are reporting that the money has now been successfully transferred, and that fresh  letters of order have been sent out to Saab's parts suppliers.

Pangda will then buy around 24 percent of the company, for a further €65m, which Muller said "will be enough for the mid-term, or a year" to keep the company afloat.

A similar rescue plan with Hawtai Motor group fell through last week, after talks broke down, with the Chinese manufacturer blaming "commercial and economic realities" for the split.

Pangda has over a thousand dealerships in China, and could theoretically help Saab exploit the booming Chinese market if the plan goes ahead, but the deal still requires consent from the Chinese Government and European Investment Bank before being finalised.