Saab continues talks with Chinese investors on a takeover deal

Article by Christian Andrei, on November 17, 2011

Even when a memorandum of understanding signed by the parties only runs until Nov. 15, Saab said that the negotiations between its owner, Swedish Automobile, and two Chinese investors will continue. Saab spokeswoman Gunilla Gustavs said that talks are ongoing over the structure of the takeover deal. It was three weeks ago that the Chinese companies, Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co., signed a memorandum of understanding with Swedish Automobile. They agreed to pay 100 million euros ($142 million) to purchase all of the shares in Saab.

This is the replacement of the first rescue plan proposed by Youngman and Pang Da, which had both agreed to take a combined 53.9% stake in Swedish Automobile for 245 million euros ($340 million).

According to the court details unveiled at the end of October, the Chinese companies said that they will put in over a half a billion euros ($709 million) additional capital into Saab as part of its goal to make the automaker more profitable by 2014.

But General Motors Co., the former owner of Saab, contradicted the deal and said it won't continue to license its technology to Saab after the proposed ownership change. This strategy could end plans to sell the brand. Gustavs said that the talks continue in the hopes that a “workable solution” will be reached. [source: AutoWeek]

Topics: saab, china

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