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Saab on sale to Chinese for R1bn

2011-10-31 11:06

Struggling Saab is set to follow sister Swedish automaker Volvo into Chinese ownership through a 100-million euro (R1.1-billion) deal.

The offer has been made by Pang Da Automobile Trade Co and Zhejiang Youngman Lotus Automobile.

Saab has not produced cars for months and has lurched from cash crisis to cash crisis to court protection from creditors, a process in danger of collapse before the Chinese agreement.

GOING GEELY'S WAY


If successful, it will be the second Chinese purchase of a Swedish car company in just over a year after Geely bought Volvo in August 2010 from Ford. The plan is to continue making the cars in Sweden but also start production in China.

Any new equity deal from the two Chinese investors would require approval from the Chinese government and the outcome could be far from certain because Beijing follows a strict and price-sensitive policy when it comes to overseas acquisitions.

The European Investment Bank and General Motors also, as creditors to Saab, have to give their approval to an agreement.

A meeting with creditors was due today, October 31, 2011.

Reuters