Cash strapped Saab has a new saviour, just a few days after the deal with Chinese automaker Hawtai fell through. The Swedish brand’s owner, Spyker, has signed a memorandum of understanding (MoU) with Pang Da Automobile Trade Co Ltd, China’s largest publicly traded automobile distributor with over 1,100 dealerships nationwide.
The MoU includes a strategic alliance consisting of a 50/50 distribution joint venture and a manufacturing joint venture (MJV) for Saab vehicles as well as for an MJV-owned brand (a so-called ‘child brand’) in China. Saab will have up to 50% stake in the MJV, with Pang Da and another manufacturing partner owning the remaining shares.
In return, Saab gets what it needs the most for now – cash. Pang Da will pay 30 million euro for the purchase of Saab vehicles and is expected to make an additional 15 million euro payment for the purchase of more Saab vehicles within 30 days, subject to certain circumstances. The 30 million euro initial payment will give Saab the ability to pay its suppliers and the liquidity required to restart production.
In addition, the Chinese company will take an equity stake in Saab’s parent Spyker for a total amount of 65 million euro at 4.19 per share. This equates to 24% of Spyker, and Pang Da will have the right to nominate a member of the Supervisory Board of Spyker and/or the board of Saab.
Isn’t that quite a bit of purchasing power for a car dealer? Well, Pang Da raised nearly 6.5 billion yuan (over 703 million euro) in its initial public offering last month, so it definitely has the means.
© 2011 Paul Tan's Automotive News. All Rights Reserved.
This story originally appeared on Paul Tan's Automotive News on Wed, 18 May 11 00:31:45 +0000.
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