Spyker turns to China’s Pangda for Saab rescue
Published on May 16, 2011 by Tycho de Feijter
* Gets 30 mln euros immediately for Saab vehicle purchases
* Second tranche of 15 mln euros to follow
* Deal will later provide 65 mln euros in equity funding
* Deal will secure Saab’s medium-term funding
* Approvals for JV needed from China govt agencies, GM, EIB
* Spyker shares surge 18 pct
Via Reuters. China’s largest listed car distributor has come to the rescue of Saab in a deal worth as much as 110 million euros, potentially staving off the collapse of one of Sweden’s best-known brands. Spyker Cars, the Dutch owner of Saab, on Monday announced a deal with China’s Pangda Automobile Trade Co Ltd which it said would secure Saab’s medium-term funding needs.
The deal is the second pact with a Chinese rescuer within as many weeks, and could still face setbacks given the difficulties some Chinese firms have had in the past when it comes to obtaining the requisite government approvals for acquisitions or overseas investments.
However Victor Muller, CEO of Spyker and Saab Automobile, said that it would be much easier to obtain the necessary approvals because Pangda is a car distributor and not a manufacturer. He added that Pangda, which is in the business of distributing cars, does not need approvals to buy Saab cars for sale in China, paving the way for Saab to immediately receive 30 milion euros for vehicle sales.
A deal with another Chinese company, Hawtai Motor Group, fell through last week. Hawtai said on Friday that “commercial and economic realities” and not a lack of regulatory approval had led to the breakdown of the deal.
The latest deal involves an agreement by Pangda to buy Saab vehicles in two tranches. An initial purchase worth 30 million euros is already in train and a further sale worth 15 million euros will follow, Muller told a conference call with journalists on Monday. Pangda, which raised raised nearly $1 billion in its initial public offering last month, will also take a 24 percent equity stake in Spyker for a total of 65 million euros, or 4.19 euros per share.
“It still requires a lot of work before this 65 million is in our bank account, to get the permits,” Muller said, but “when we have the 65 million euros, it will be enough for the mid-term, or a year.”
Spyker shares, initially suspended when the market opened in Amsterdam, surged 18.3 percent to 4.2 euros by 0844 GMT.