Saab may finally see the light at the end of the tunnel, thanks in large part to Pang Da, a Chinese auto distributor. Saab-Spyker announced today that the two companies have reached a deal to form a new joint venture, which provides Saab with a much-needed cash infusion to the tune of €65 million ($92 million USD).
The agreement between the companies will total €65 million (just under $92 million at current exchange rates) once the deal is complete, but releases from Saab-Spyker proclaim the completed transaction could potentially bring the automaker nearly $155 million.Those figures are far short of the estimated $222 million Saab would have received in a stillborn deal with the Hawtai Motor Group, but are still welcome nonetheless.
Pang Da is China’s largest automotive distributor, and the majority of this proposed deal involves — what else? — distributing Saab vehicles in China. Pang Da has already placed an order for €30 million ($42.4 million) worth of vehicles, and has agreed to place a €15 million ($21.2 million) order at a later date.
Additionally, Saab, Pang Da, and a yet-to-be-named third party will also enter into a joint venture to distribute and manufacture Saab vehicles in China, and also create a Chinese-market sub-brand. The joint venture will be split with Saab owning half, and Pang Da and its partner in control of the other 50-percent stake. Pang Da will also take a 24-percent equity stake in Spyker and gain the option of a seat on the company’s supervisory board and/or Saab’s board.
The first sale of vehicles is pending transaction approval, but executives on both ends expect few issues in the approval of this deal. Since Pang Da is a car distributor, the act of selling Saabs won’t require intense scrutiny by the Chinese government. That said, a number of government banks do need to approve the transfer of funds to make this idea reality.
Source: Spyker, Automotive News (Subscription required)