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Saab signs a Chinese contract that pumps it badly needed money but EIB has to approve



  

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Tuesday, 03 May 2011
Battling Saab automobile has secured a contract in China, in a deal that could see the revival of the company. Through the agreement, Saab is to secure €150 million for its financing, almost exactly why Saab went to China for.

Saab Automobile and Motor Group Hawtai are in co-operation which includes a so-called joint venture for production, technology and distribution, writes Spyker Cars in a statement.

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"With our partnership with Hawtai we ensure our medium-term funding and it gives Saab Automobile, a chance to enter the Chinese market. It also establishing a technological partnership with a strong Chinese automakers," said Saab President Victor Muller in the press release.

"With Hawta’s technology for clean diesel engines and its production capacity and the company's ambitious development program we have found the right partner to develop the Saab and build a strong partnership," adds Muller.

For the transaction to complete this arrangement must be approved by Chinese authorities, the European Investment Bank (EIB) and the Swedish Debt Office.

As part of the deal Tenaci Capital will convert €42 million of its existing loan to Saab owners Spyker Cars shares, which dampens the credit costs for Spyker significantly, according to car manufacturer.

Hawtai will invest €120 million in Spyker Cars that will give the company more than 29.9 percent of the shares.
The remaining €30 million will be provided in the form of convertible bonds maturing in six months at an interest rate of 7 percent.

Richard Zhang, vice chairman of Hawtai, look for its part, Saab Automobile as an "icon" among brands.
"It gives us access to innovative technology and an international network that would otherwise have taken us decades to build. This is a great day for a relatively young company formed just a decade ago," said Zhang in a statement.
By Scancomark.se Team


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