Cars, the parent of Saab Automobile, inks a preliminary agreement with Chinese dealer group Pang Da Automobile to form a joint venture securing E110 million ($155.2 million) in medium-term funding for the struggling Swedish auto maker.
Last week, an E150 million ($211.7 million) investment and loan agreement with China’s Hawtai Motor Group broke apart anddecided to pursue opportunities with other Chinese sources.
Landing the new equity partner comes ahead of Spyker’s annual shareholder’s meeting, where the company will submit plans to change its name to Swedish Automobile.
The name change comes in response to Netherlands-based Spyker selling of its Spyker-brand exotic sports car business earlier this year to focus on rejuvenating Saab and requires shareholder approval.
According to terms of the agreement with Pang Da, the dealer will take 24% of Spyker in return for some E65 million ($91.7 million).
Spyker additionally would receive E30 million from Pang Da ($42.3 million) as payment for the purchase of Saab vehicles and another E15 million ($21.2 million) within 30 days of purchase for additional vehicles, given the deal passes regulatory scrutiny.
The agreement also calls for a JV between Spyker and Pang Da covering the distribution and manufacturing of Saab vehicles in the Chinese market. Saab would hold a 50% stake, while Pang Da and a third undetermined investor would make up the remaining half of the unit.
Another part of the JV, as yet unnamed, would build other vehicles for China.
Saab plans to reach a payment and delivery agreement with its parts suppliers upon receiving the initial E30 million from Pang Da. The auto maker’s inability to pay its bills led to production shutdown at its Trollhattan, Sweden, assembly plant, several weeks ago.
The Pang Da investment serves as another peak in a rollercoaster 18 months for Saab.
The auto maker narrowly escaped liquidation last year after Netherlands-based Spyker and its owner Victor Muller bought Saab fromin a transaction valued at $400 million. The European Investment Bank pledged additional funds to ensure Saab’s future.
But turnaround costs proved higher than anticipated, forcing Spyker to sell the sports car business and pursue the link with Hawtai.
Hawtai would have acquired up to 29.9% of Spyker before the deal was scuttled.
Pang Da represents China’s largest publicly traded dealership group, with more than 1,100 stores in its booming home market.