Chinese firms to invest ‘billions’ in Saab

Chinese firms to invest 'billions' in Saab
Chinese automakers Pang Da and Youngman, the new owners of Sweden's Saab, plan to pump some 7.5 billion kronor ($1.16 billion) into the firm, according to a report on Sveriges Television (SVT).

The first stage of the investment amounts to 2 billion kronor earmarked for the firm’s factory in Trollhättan in western Sweden so that the production lines can be restarted after over six months of inaction.

The Chinese duo are then set to invest 5.5 billion kronor in the development of new car models, according to the SVT Rapport news programme.

The investment will in part be aimed at developing a replacement model for the current Saab 9-3 as a well as a smaller Saab model and two larger vehicles.

Eric Geers at Saab was unwilling to confirm the details in the reports but said that a restructuring plan to be presented on Monday will contain a “major investment”.

“There are new figures coming. I can say that there is an enormous support from our intended future owners. They want to invest heavily in Saab Automobile. That is clear.”

Pang Da and Youngman agreed on Friday to purchase Saab Automobile, according to a statement issued Saab owner Swedish Automobile.

“Swedish Automobile N.V. (Swan) announces that it entered into a memorandum of understanding with Pang Da and Youngman for the sale and purchase of 100% of the shares of Saab Automobile AB (Saab Automobile) and Saab Great Britain Ltd. (Saab GB) for a consideration of €100 million”, the company said in a statement.

After the announcement, the office of Saab’s court-appointed administrator, Guy Lofalk, withdrew a petition to abandon the reorganisation of the beleaguered Swedish carmaker, a step taken last week when talks with the Chinese partners to obtain €245 million ($335 million) in funding in exchange for about half the company appeared to have collapsed.

Swedish daily Svenska Dagbladet (SvD) reported earlier in the week that Pang Da and Youngman had instead offered a mere 200 million kronor ($30.4 million) to buy all of Saab.

After setting a price tag nearly five times higher, Saab’s charismatic chief executive Victor Muller told the TT news agency Friday he was “thrilled.”

“Now the company’s future is really secured. The future looks very bright now,” he said.

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