Saab reaches deal to pay suppliers and restart production

17 May 2011

17 May 2011 | Angeline Albert

Swedish car firm Saab Automobile has secured a deal with Chinese investors that will help the firm pay its suppliers.

Production at the vehicle maker’s factory in Trollhättan in Sweden has stopped for more than a month because the company was unable to pay its suppliers. But owner Spyker Cars has agreed a deal with Chinese vehicle distributor Pang Da Automobile Trade to provide a financial boost.

Pang Da will purchase Saab cars worth €45 million (£39.4 million) and a 24 per cent stake in Spyker worth €65 million (£56.9 million). The Chinese company will also make a further $92 million (sic) (£56.6 million) investment.

A statement from Spyker Cars yesterday said: “The €65 million share subscription by Pang Da will secure Saab Automobile’s medium-term funding. With the receipt of Pang Da's €30 million initial payment, Saab Automobile aims to come to an agreement on payment and delivery terms with its suppliers as it secured the liquidity that is required to restart production as soon as possible.”

In return for the investment Pang Da, which has over 1,100 car dealerships across China, has agreed to a strategic alliance with the car company which involves a 50-50 distribution joint venture and a 50-50 manufacturing joint venture in the Chinese market for Saab-branded vehicles as well as the creation of a new brand for the country.

“In order to improve lead times to customers and dealers on existing and future orders, Saab Automobile will work together with its suppliers to minimize any impact from the recent production stop,” the company added.

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