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Saab Receives Cash But Chinese Deals May Still Be Blocked

 
2 2,096 views Oct 13, 2011
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2008 Saab 9-3 Sedan

2008 Saab 9-3 Sedan

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Update: Earlier this week news broke that Saab's Chinese partners would be blocked from their bid to give the Swedish automaker a much-need cash infusion.

Today, Saab has responded with a statement that says the reports were misinformed, and that it has received a first payment by China's Youngman under the bridge loan funding commitment as announced on September 12.

Further payments under the amended and final bridge loan agreements signed between Youngman and Saab are expected to be made during this week and by October 22 of this year.

It is the intention to repay the bridge loan with the proceeds of the previous $350 million equity investments by Youngman and Pang Da, which are still subject to approval by relevant authorities and parties, mainly the Chinese government, which Saab’s parent company Swedish Automobile expects to receive during the next weeks.

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China's Zhejian Youngman Lotus (Youngman) and Pang Da Automobile signed a memorandum of understanding (MOU) with Saab in June to provide as much as $350 million in financing for Saab to help it avoid bankruptcy. That financing is likely to be blocked, sending Saab into bankruptcy, according to a report from Autocar.

The Chinese government is the one doing the blocking, according to the report, because the stakes offered in return do not include any intellectual property rights to Saab's cars. Saab had agreed to license the architecture for its next-gen 9-3, codenamed Phoenix, to the Swedish company SPV, and from there to Youngman through yet another agreement, but that transfer apparently isn't substantial or exclusive enough to merit the Chinese government's approval.

Saab is currently under court administration as it works to restructure its operations, but that protection may fall by the wayside once the projected cash infusion from Youngman and Pang Da is blocked. Worse still, the Swedish courts could beat the Chinese to the punch, pre-emptively blocking the deal and declaring Saab bankrupt as early as today.

Given the short time frame, we expect an official statement from Saab and its parent company Spyker soon. We'll bring you the latest as it develops.



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Comments (2)

  1. fb_810175351 avatar F. Jay Ver Posted: 10/13/2011 12:31pm PDT

    Logic says that since the first payment has been recieved the deal was obviously not blocked by the Chinese government. Furthermore since the Chinese have approved the bridge loan then it bodes well for the MOU as well.
     
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  2. fb_1637149135 avatar Patrick D'Agostino Posted: 10/29/2011 8:16pm PDT

    After what I’m experiencing with ’12 Volvo S60 & the quality issues that corporate won’t acknowledge. The Chinese ownership is already starting to show its presence. Now that Saab will also be under the Asperity of the Chinese. This marks the death of what the world has come to expect from a Swedish Automobiles. The offbeat, well built & SAFE (MY ’12 Volvo has Windows stamped CHINA) The Swedish automobile option is going the way of a knockoff Rolex. It seems the Autopopclypse is still claiming victims…
     
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