Saab Automobile reaches a E70 million ($95.5 million) technology-sharing agreement with China’s Zhejiang Youngman Lotus Automobile, providing the Swedish auto maker much-needed cash as it tries to reorganize its business.
The deal gives Youngman access to Saab’s Phoenix architecture, which will shoulder the next-generation Saab 9-3 sedan. The car is expected from Saab next year.
Saab parent company, Swedish Automobile, says the auto maker will use the money as bridge financing to stay afloat and then repay the funds once it receives an anticipated E245 million ($350.6 million) investment from Youngman and Chinese dealership-operator Pang da.
The larger investment awaits regulatory approval. Saab meanwhile is seeking the equivalent of bankruptcy in its home country.
The auto maker’s application for protection from creditors was denied last week and it plans to file for reorganization today.
Saab has been surviving on loans from investment partners sincedivested the unit to Danish businessman Victor Muller in 2009.
But Muller so far has been unable to revive the 64-year-old auto maker. Unable to pay suppliers and employees, Saab decided to pursue reorganization a second time.
The auto maker’s Trollhattan assembly plant has been idle since April, after unpaid suppliers quit shipping parts.
Saab unveiled the PhoeniX concept car using the new architecture at the Geneva auto show earlier this year.
The car would represent the brand’s most important product, but its development has drained the auto maker’s finances.
The larger investment in Saab by Youngman and Pang da calls for the development of three vehicles for the Chinese market.