Saab announces new Chinese partnership

Swedish car maker Saab has signed a new framework agreement with China's Pang Da Automobile, the firm's Dutch owner Spyker said on Monday.

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"The memorandum of understanding includes a strategic alliance consisting of a 50-50 distribution joint venture," Spyker said in a statement.

The deal also covers "a manufacturing joint venture (MJV) for Saab branded vehicles as well as for an MJV-owned brand (the so-called 'child brand') in China," the statement said.

Pang Da will initially transfer €30 million ($42 million) to purchase Saab cars and another €15 million to purchase more vehicles within 30 days of the initial purchase.

The Chinese company will "take an equity participation in Spyker for a total amount of €65 million at €4.19 per share representing up to 24 percent of Spyker's outstanding share capital on a fully diluted basis.

"Both parties are confident that this partnership allows Saab Automobile and Pang Da to create a strong business, initially in the distribution and subsequently in the manufacturing of Saab vehicles in China," Spyker head Victor Muller said.

Spyker described Pang Da as "China's largest publicly traded automobile distributor with over 1,100 dealerships nationwide".

"Having just gone public ourselves three weeks ago, we are delighted to have the opportunity to become a substantial shareholder in Spyker, Saab's parent," Pang Da chief executive Pang Qinghua said.

"We very much look forward to collaborating with Saab's management to successfully enter our promising home market," he added

Monday's announcement comes less than a week after Spyker said a deal with Chinese carmaker Hawtai had fallen through.

The cash-strapped carmaker, which halted production "until further notice" last month as suppliers stopped deliveries over unpaid bills, had said it was looking into partnerships with other Chinese companies.