2 Chinese firms to buy Saab
By Jin Jing |
October 29, 2011, Saturday
|
Print Edition
Print Edition
TWO Chinese auto firms have agreed to buy all of the shares in Saab Automobile AB, saving the 60-year-old company from bankruptcy.
Saab's parent Swedish Automobile NV said in a statement yesterday that it will sell Saab to China's Pang Da Automobile Trade Co and Zhejiang Youngman Lotus Automobile Co for 100 million euros (US$142 million).
The two Chinese firms will provide sufficient financing so that a court-backed reconstruction process under creditor protection can continue, it said.
Saab has been struggling to find cash and stay alive after it filed for bankruptcy protection last month. It was short of money to pay staff and suppliers while production was suspended earlier this year.
Pang Da and Youngman struck a deal to pay 245 million euros for a majority stake in Swedish Automobile in July. But the deal collapsed early this week.
Swedish Automobile said the latest agreement, which will be valid until November 15, is still pending government approvals from China and Sweden.
"It's obvious that Saab will be at a dead-end without Chinese buyers," said John Zeng, a Shanghai-based analyst at JD Power.
But he believed it will be difficult to gain approval from Chinese authorities amid fears of market over-capacity.
"Pang Da and Youngman also lack strong financial capabilities to turn around debt-ridden Saab, and they even lack car manufacturing experience," he said by telephone. "Also, Saab's brand image has been damaged quite a lot already."
Analysts doubt whether Pang Da and Youngman would make good use of Saab's existing technologies.
Independent analyst Tian Yongqiu said: "Even though the price seems favorable than earlier, there will still be huge pressure on the two Chinese firms to deal with Saab's debts and complicated technology problems."
The majority of models made by Saab now are under licensed production from General Motors while Saab's old vehicle platforms and other power-train technologies were sold to China's Beijing Automotive Industry Holding Co in 2009.
If the deal goes through, Pang Da and Youngman would be the latest Chinese auto companies to secure foreign nameplates in an attempt to acquire advanced technologies and lift their brand awareness.
China's Geely Automobile last year acquired Swedish premier car maker Volvo from Ford while China's SAIC Motor Corp bought the assets of bankrupted British carmaker Rover in 2005.
Saab's parent Swedish Automobile NV said in a statement yesterday that it will sell Saab to China's Pang Da Automobile Trade Co and Zhejiang Youngman Lotus Automobile Co for 100 million euros (US$142 million).
The two Chinese firms will provide sufficient financing so that a court-backed reconstruction process under creditor protection can continue, it said.
Saab has been struggling to find cash and stay alive after it filed for bankruptcy protection last month. It was short of money to pay staff and suppliers while production was suspended earlier this year.
Pang Da and Youngman struck a deal to pay 245 million euros for a majority stake in Swedish Automobile in July. But the deal collapsed early this week.
Swedish Automobile said the latest agreement, which will be valid until November 15, is still pending government approvals from China and Sweden.
"It's obvious that Saab will be at a dead-end without Chinese buyers," said John Zeng, a Shanghai-based analyst at JD Power.
But he believed it will be difficult to gain approval from Chinese authorities amid fears of market over-capacity.
"Pang Da and Youngman also lack strong financial capabilities to turn around debt-ridden Saab, and they even lack car manufacturing experience," he said by telephone. "Also, Saab's brand image has been damaged quite a lot already."
Analysts doubt whether Pang Da and Youngman would make good use of Saab's existing technologies.
Independent analyst Tian Yongqiu said: "Even though the price seems favorable than earlier, there will still be huge pressure on the two Chinese firms to deal with Saab's debts and complicated technology problems."
The majority of models made by Saab now are under licensed production from General Motors while Saab's old vehicle platforms and other power-train technologies were sold to China's Beijing Automotive Industry Holding Co in 2009.
If the deal goes through, Pang Da and Youngman would be the latest Chinese auto companies to secure foreign nameplates in an attempt to acquire advanced technologies and lift their brand awareness.
China's Geely Automobile last year acquired Swedish premier car maker Volvo from Ford while China's SAIC Motor Corp bought the assets of bankrupted British carmaker Rover in 2005.
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