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Saab gets Chinese takeaway

2011-05-03 11:18

HICCUPS: Saab, been plagued by setbacks, receives a welcome cash injection from China's Hawtai Motor Group.

AMSTERDAM, The Netherlands - Spyker Cars said China's Hawtai Motor Group would invest 150 million euros (about R1.47bn) in the Dutch firm's ailing Swedish brand Saab in return for shares, enabling Saab to pay bills and resume production.

The deal is the second time that a Chinese company has helped to bail out a Swedish automaker. Geely, China's largest privately run automaker, agreed in 2010 to buy Volvo, then owned by Ford.

Saab's production has been halted for several weeks since the company ran into a cash crunch and was unable to pay its suppliers.

APPROVAL NEEDED

Spyker said Hawtai will pay 120 million euros (roughly 1.18bn) for a 29.9% stake in the firm and has agreed to pay a further 30 million euros (about R294m) in the form of a convertible loan with a six-month maturity and a conversion price of 4.88 euros per share.

Saab said the transactions were subject to approval from certain Chinese government agencies, the European Investment Bank and the Swedish National Debt Office.

Spyker chief executive Victor Muller said: "With Hawtai's clean-diesel engine technologies and production capacity and its ambitious development programmes we've found the right partner to develop the Saab business and build a solid relationship."

As part of the transaction, Muller's investment firm Tenaci Capital will also convert 42 million euros of its current loan to Spyker into shares at 4.88 euros per share to help reduce Spyker's interest burden.
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