Saab gets €150m lifeline from China’s Hawtai Motor Group

imageSwedish car maker Saab appears to have secured a cash injection after Hawtai Motor Group, a Chinese company, agreed to invest €150m (£135m) to rescue the business.

The investment means Sweden’s two most famous automotive brands are now backed by China after Geely bought Volvo from Ford last year.

An ailing Saab was acquired from General Motors for $400m (£243m) by Dutch car maker Spyker, but its turnaround plan has been hindered by disappointing sales. This sparked a liquidity crisis that led to Saab halting production on April 6 as unpaid suppliers stopped deliveries.

Victor Muller, chief executive of Spyker, said the deal with Hawtai secured a “medium term” funding solution for the company. Under the deal, Hawtai will invest €120m for a 29.9pc stake in Spyker and provide a €30m convertible loan. The partnership also involves the sharing of technology and Hawtai building Saab cars in China.

Mr Muller said: “The partnership with Hawtai allows Saab Automobile on the one hand to continue executing its business plan since we secured the required mid-term financing subject to meeting certain conditions, whilst on the other hand it allows Saab Automobile to enter the Chinese car market and establish a technology partnership with a strong Chinese manufacturer.”

The deal is subject to approval from certain Chinese governmental agencies, the European Investment Bank and the Swedish National Debt Office. Mr Muller said he expected regulatory approval in six to 12 weeks and anticipated no opposition from the EIB, which has lent the car maker €280m. Spyker is also seeking investment from Russian financier Vladimir Antonov.
Richard Zhang, vice-president of Hawtai, said: “This is a great day for our relatively young company which was founded 10 years ago. The partnership with the iconic Saab brand will give us access to innovative technologies and an international network which would have taken us decades to build. Our participation in Spyker, Saab’s parent company, demonstrates our commitment to the future of Saab Automobile as a premium European car manufacturer.”


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