Saab announces memorandum of understanding with China's Pang Da

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Filed under: China, Saab

To say that Saab has struggled of late would be a gross understatement. The automaker has had to fight for loans, production was halted twice due to failure to pay suppliers, and an agreement with China's Hawtai Motors was scrapped after all parties failed to agree to the terms. Then there was the supposed agreement with Great Wall Motor, which the Chinese automaker flat-out denied. What a mess.



But while Saab has certainly struggled, it would be wrong to say that the Swedish automaker isn't trying. A Saab press release shows that the Swedish automaker has found another Chinese dance partner, and this time, a "Memorandum of Understanding" has been signed between Pang Da Automobile Trade Co. and the Swedish automaker.



Pang Da, the largest publicly traded automotive distribution chain in China, has agreed to purchase $43 million worth of Saab vehicles, and another $21 million 30 days later. In addition, Pang Da will pay $92 million for a 24 percent stake in Spyker. For Saab, the deal represents a 50 percent ownership in a distribution joint venture to sell Saab products. A separate 50 percent stake in a manufacturing joint venture has also been agreed upon, though the manufacturing partner has yet to be named.



Meanwhile, Automotive News reports that a long-term deal with a Chinese automaker could result in a majority stake in Saab. AN, which cites a report in the Swedish business daily Dragens Industri, quotes an unnamed source as saying, "It is not a problem if a Chinese partner wants a direct majority in Saab Automobile."



Since the cash situation at Saab appears to be changing almost daily, it's difficult to see how this will end. But for the short term, the Pang Da deal should help Saab quite a bit, provided the deal goes through as planned. Hit the jump to read Saab's press release.

Continue reading Saab announces memorandum of understanding with China's Pang Da

Saab announces memorandum of understanding with China's Pang Da originally appeared on Autoblog on Mon, 16 May 2011 10:32:00 EST. Please see our terms for use of feeds.

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