Saab Agrees Stake Sale, JV With China Partners
Swedish car maker Saab has agreed a rescue package from two Chinese car companies, handing over a majority stake in return for a cash injection to avert a potential collapse, Reuters reported. Saab owner Spyker Cars said on Monday it had signed a non-binding memorandum of understanding for Zhejiang Youngman Lotus Automobile Co to take a 29.9 percent stake in the company and Chinese car distributor Pangda (601258.SS) to take a 24 percent stake for a combined 245 million euros ($352 million). The deal hinges on approval from the Chinese and Swedish governments and a green light from the European Investment Bank and Saab shareholder General Motors. Gaining Chinese government clearance could be difficult, however, as Beijing follows a strict and price-sensitive policy when it comes to overseas acquisitions. "Spyker needed funding. The fact that they get this amount is positive ... but for existing shareholders there is quite a bit of dilution," AEK analyst Martin Crum said. "We have to wait to see whether all the government and third parties give their blessing to this. It will not be easy." Shares in Dutch-listed Spyker, which has been chasing several deals to resolve a cash crunch that halted production for seven weeks earlier this year, jumped 25 percent. Spyker chief executive Victor Muller said the deal would secure Saab's mid and long-term financing and told Swedish news agency TT approval should take two to three months. Read more.