Chinese firms swoop for Saab

STOCKHOLM - Two Chinese companies have reached a tentative deal to take over the struggling automaker Saab Automobile AB for 100 million euros ($141 million), according to Saab's owner, Swedish Automobile NV, on Friday.

The move by Zhejiang Youngman Lotus Automobile Co and Pang Da Automobile Trade Co marks the latest rescue attempt for cash-strapped Saab, which has been fighting for survival since General Motors Co sold it in 2010 to a small Dutch company specializing in luxury cars.

Production at Saab's manufacturing plant has been suspended for most of the year while the company has struggled to pay suppliers and staff. In September it entered a reorganization process similar to Chapter 11 bankruptcy protection in the United States.

Swedish Automobile, the Dutch company previously known as Spyker Cars NV, said it had entered a Memorandum of Understanding with Youngman and Pang Da for the sale of all its shares in Saab.

If the deal is finalized and approved by regulators, it would mean that both of Sweden's automakers will end up in Chinese hands. China's Geely Holding Group bought Volvo Cars AB from Ford Motor Co for $1.5 billion in 2010.

"It's fantastic because the future of the company is now secured," Swedish Automobile CEO Victor Muller told Swedish Radio. "We know it will have the stability and the funding to execute our business plan."

Guy Lofalk, who is in charge of Saab's reorganization under bankruptcy protection, withdrew his earlier request to terminate that process, saying the Chinese deal had improved the chances of a successful outcome.

In a document filed at the Vanersborg District Court in Sweden, Lofalk said that Pang Da and Youngman had agreed to finance the reorganization as well as Saab's business plan.

"These new conditions must be investigated before a decision can be made on terminating the reorganization," he said. The two Chinese companies had earlier agreed to invest 245 million euros for a 53.9 percent stake in Saab, but it was held up by Chinese regulators and Swedish Automobile canceled the agreement.

Associated Press