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Saab-owner Spyker Cars has announced a €245-million (about R2.23 billion) deal with two Chinese auto companies to distribute and manufacture Saab cars in China.
The non-binding agreement with Zhejiang Youngman Lotus Automobile and Pang Da Automobile is the latest attempt by Spyker to turn around the loss-making brand it bought from General Motors in 2010. Under the deal, which needs regulatory approval, Youngman will invest the equivalent of R1.33-billion for a 29.9 percent interest in Spyker and stakes in two joint ventures being formed to distribute and make Saab cars in China.
In addition, Pang Da will increase its investment in Spyker to the equivalent of R1.06-billion from a previously agreed R633.8-million to retain a 24 percent stake in the company.
SIMILAR MINDSET
Spyker CEO Victor Muller said the agreement "significantly strengthens Saab's financial position and will secure the mid and long-term financing of Saab Automobile". The company has struggled to pay suppliers in recent months.
"Pang Da and Youngman have demonstrated an entrepreneurial mind-set similar to ours and which we feel will be instrumental in establishing Saab's presence in China," Muller said.
Shares in Spyker rose 25 percent to €3.19 on the Amsterdam Stock Exchange after the announcement.
MOVING TOWARDS A GOAL
An entry into the Chinese market could help Spyker toward its goal to increase production to about 100 000 Saab cars a year but so far the company has failed to meet targets. Saab sold just less than 32 000 cars in 2010 against a target of 45 000.
Youngman CEO Pang Qingnian said his company had been in contact with Saab for some time to agree to manufacturing in China.
"We feel Saab, as a premium European brand, appeals strongly to the taste and preferences of the Chinese customer who is looking for top-quality vehicles with the highest levels of safety, driving pleasure and comfort and an unmistakable design."
Analysts have cautioned that Saab - known in the west for its aerodynamic sedans - isn't well-known in China. It's also not clear whether the deal would get the necessary approvals in China.
EARLIER AGREEMENT
A previous agreement between Spyker and Hawtai Motor Group fell apart because of regulatory issues. The new three-way deal would set up a manufacturing joint venture in which Saab would own 45 percent, Youngman 45 percent and Pang Da 10 percent.
Another joint venture would be formed for distribution in which Youngman would own 33 percent, Pang Da 34 percent and Saab 33 percent.
Spyker said talks to raise more cash by selling Saab's property were continuing but an announcement was expected soon.
The non-binding agreement with Zhejiang Youngman Lotus Automobile and Pang Da Automobile is the latest attempt by Spyker to turn around the loss-making brand it bought from General Motors in 2010. Under the deal, which needs regulatory approval, Youngman will invest the equivalent of R1.33-billion for a 29.9 percent interest in Spyker and stakes in two joint ventures being formed to distribute and make Saab cars in China.
In addition, Pang Da will increase its investment in Spyker to the equivalent of R1.06-billion from a previously agreed R633.8-million to retain a 24 percent stake in the company.
SIMILAR MINDSET
Spyker CEO Victor Muller said the agreement "significantly strengthens Saab's financial position and will secure the mid and long-term financing of Saab Automobile". The company has struggled to pay suppliers in recent months.
"Pang Da and Youngman have demonstrated an entrepreneurial mind-set similar to ours and which we feel will be instrumental in establishing Saab's presence in China," Muller said.
Shares in Spyker rose 25 percent to €3.19 on the Amsterdam Stock Exchange after the announcement.
MOVING TOWARDS A GOAL
An entry into the Chinese market could help Spyker toward its goal to increase production to about 100 000 Saab cars a year but so far the company has failed to meet targets. Saab sold just less than 32 000 cars in 2010 against a target of 45 000.
Youngman CEO Pang Qingnian said his company had been in contact with Saab for some time to agree to manufacturing in China.
"We feel Saab, as a premium European brand, appeals strongly to the taste and preferences of the Chinese customer who is looking for top-quality vehicles with the highest levels of safety, driving pleasure and comfort and an unmistakable design."
Analysts have cautioned that Saab - known in the west for its aerodynamic sedans - isn't well-known in China. It's also not clear whether the deal would get the necessary approvals in China.
EARLIER AGREEMENT
A previous agreement between Spyker and Hawtai Motor Group fell apart because of regulatory issues. The new three-way deal would set up a manufacturing joint venture in which Saab would own 45 percent, Youngman 45 percent and Pang Da 10 percent.
Another joint venture would be formed for distribution in which Youngman would own 33 percent, Pang Da 34 percent and Saab 33 percent.
Spyker said talks to raise more cash by selling Saab's property were continuing but an announcement was expected soon.