Saab receives another cash boost from new China partner

ERJ staff report (AN)

Stockholm -- Saab has received another cash boost from its new China partner Pang Da with an additional order for 630 cars, worth 15 million euros.

The order comes on top of an order for 1,300 cars worth 30 million euros received by Saab from Pang Da earlier this month.

The Chinese company will pay in advance for the order and delivery of the vehicles will start in the third quarter, Saab said today.

The order follows a visit to Saab's factory in Trollhattan last week by senior Pang Da representatives, headed by Chairman Pang Qinghua. They watched the restart of Saab production after an almost two-month break when the automaker was pushed to the brink of collapse after it ran out of cash to pay suppliers.

In a statement released today, Saab CEO Victor Muller said: "I am delighted that Pang Da, as previously planned, has ordered an additional 630 Saab vehicles. This not only shows the potential for the Saab brand in the Chinese market, but also that in Pang Da, we have found the right partner."

Muller, who is also CEO of Saab owner Spyker Cars, added: "I look forward to the next step in our business relationship when we set up joint ventures for distribution and, at a later stage, production in China together with a still-to-be-named manufacturing partner."

Pang Da has already provided Spyker with an advance payment in exchange for Saab cars to be sold in China.

Pang Da, which raised nearly $1 billion in its initial public offering in April, wants to take a 24 percent equity stake in Spyker for a total of 65 million euros, for 4.19 euros per share as part of a 110 million euro deal.

The Chinese car distributor is waiting for regulatory approval at home. Sweden has guaranteed a European Investment Bank (EIB) loan to Saab and also has to agree to any shareholder changes, as does the EIB and former owner General Motors Co.

"Our visit to Trollhättan last week has further strengthened our belief that we made the right decision in entering a partnership with Spyker and Saab Automobile. This additional order is the result of my firm conviction that Saab has the right product program for the Chinese market and our large distribution network will be an important asset in unlocking the potential of the brand," Pang Qinghua said in a statement.

From Automotive News (A Crain publication)