Saab skirts bankruptcy as Chinese firms take over

Saab owner Swedish Automobile said on Friday it had concluded a deal to sell 100 percent of the struggling carmaker to Chinese partners Youngman and Pang Da for 100 million euros ($141.8 million). "Swedish Automobile N.V. (Swan) announces that it entered into a memorandum of understanding with Pang Da and Youngman for the sale and purchase of 100 percent of the shares of Saab Automobile AB (Saab Automobile) and Saab Great Britain Ltd. (Saab GB) for a consideration of 100 million euros", the company said in a statement. After the announcement, the office of Saab's court-appointed administrator, Guy Lofalk, withdrew a petition to abandon the reorganisation of the beleaguered Swedish carmaker, a step taken last week when talks with the Chinese partners to obtain 245 million euros ($335 million) in funding in exchange for about half the company appeared to have collapsed. The Vaenersborg court in southwestern Sweden was expected to decide Friday whether to grant the petition. The demand to end the reorganisation of Saab came after its Dutch parent company Swan said the Chinese companies had failed to honour a partnership deal and provide 70 million euros in bridge financing while Saab underwent the restructuring process. Swedish daily Svenska Dagbladet reported earlier in the week that Pang Da and Youngman had instead offered a mere 200 million kronor ($30.4 million, 21.9 million euros) to buy all of Saab. After setting a price tag nearly five times higher, Saab's charismatic chief executive Victor Muller told the TT news agency on Friday he was "thrilled." "Now the company's future is really secured. The future looks very bright now," he said "We have the deepest pockets onboard now ensuring that the company will blossom, so I'm thrilled," he added. Swan said Friday its memorandum of understanding with the two Chinese firms was now "valid until November 15 of this year, provided Saab Automobile stays in reorganisation." The Chinese companies will dish out the 100 million euro payment in installments, Swan said in its statement, adding that "an important consideration (for entering) into the transaction is the commitment of Pang Da and Youngman to provide long term funding to Saab Automobile." With the deal, Saab will follow in the footsteps of Sweden's other large carmaker Volvo, which was bought by a Chinese company, Geely, in August 2010, for $1.5 billion (1.2 billion euros at the time). Muller, whose company Swan -- at the time called Spyker -- bought Saab from US giant General Motors early last year for 400 million dollars, also then rescuing it from the brink of bankruptcy, said on Friday he thought the price was right. "It's right if you consider the company's current situation and the fact that it has not produced cars for six months," he told TT. Production at Saab's Trollhaettan factory in southwestern Sweden has been halted almost continuously since April as suppliers stopped deliveries over mountains of unpaid bills, while the company's some 3,700 employees have seen their salary payments significantly delayed for four straight months. Following Friday's news, Swedish Automobile saw its share price soar more than 32 percent in late morning trading the Amsterdam stock exchange to 1.03 euros a share.