Another Chinese partner for Spyker-Saab
Published on June 14, 2011 by Tycho de Feijter
– Zhejiang Youngman Lotus makes buses, trucks and cars. The cars are licensed from Malaysian company Proton, the owner of British sportscarmaker Lotus. Hence ‘Zhejiang Youngman Lotus’, Zhejiang being ‘Zhejiang Province’ where the company is based.
Bloomberg: Saab Automobile owner Spyker Cars NV agreed to sell a 29.9 percent stake in the struggling Swedish carmaker to Zhejiang Youngman Lotus Automobile Co. for 136 million euros ($195 million), allowing the Chinese company to build Saabs in the world’s biggest vehicle market.
Spyker shares jumped 27 percent, the most since Jan. 11, after the Zeewolde, Netherlands-based company said today in a statement that the deal will secure long-term financing for Saab and give Chinese businesses more than half of the Swedish brand.
Saab last week halted production due to a parts shortage as it continues to negotiate payment terms with suppliers following a seven-week assembly line halt in April and May. Pangda Automobile Trade Co., which agreed an equity and distribution deal with Saab on May 16, will pay 109 million euros for a 24 percent stake instead of the previously agreed 65 million euros.
The Chinese investment, which is subject to regulatory approval, “significantly strengthens Saab’s financial position and would secure the mid- and long-term financing,” said Victor Muller, chief executive officer of Spyker and Saab.
Spyker closed 69 cents higher at 3.24 euros in Amsterdam, valuing the company at 68.4 million euros.
“Not only are we impressed with the current and future product lineup that is very well suited to the needs of the Chinese market, but we are particularly impressed by their design, engineering and manufacturing skills,” Pangda CEO Pang Qinghua, who last month visited Saab’s Trollhaettan factory, said in the statement.
Youngman, based in Jinhua, eastern China, makes cars, trucks and buses, its website says. The deals with it and Pangda need approval from Chinese authorities, the European Investment Bank, Sweden’s government and national debt office, and from General Motors Co. (GM), which sold Saab to Spyker for $74 million in cash and $326 million in preferred shares in February 2010.
Saab is also exploring short-term funding options, including the sale and lease-back of property, spokesman Eric Geers said. While it’s “working hard” to resolve the supply issue, production is unlikely to resume this week, he said.
Saab’s sales have plummeted in recent years and the carmaker was on the brink of collapse during the financial crisis before Spyker bought it.
The brand last year sold 31,696 cars and has said it will be unable to meet a target of 80,000 this year due to the production problems. It still aims to sell 120,000 autos — and to be profitable — next year.
Spyker will change its name to Swedish Automobile NV on June 15.