China Youngman Automobile Group Co Ltd buses at an auto show in Beijing. Youngman will pay 136 million euros ($195 million) to take a 29.9 percent stake in Spyker NV on a fully diluted basis, said Saab Automobile. A Jing / For China Daily

STOCKHOLM / AMSTERDAM - Saab Automobile has agreed for China Youngman Automobile Group Co Ltd to take an equity stake in the company as part of a distribution and manufacturing joint venture in China aimed at rescuing the ailing Swedish carmaker.

Saab said on Monday it had now signed a Memorandum of Understanding involving Youngman buying an equity stake in it for 136 million euros ($195 million) and entering the distribution and manufacturing joint venture in China.

The deal is subject to approval from Chinese government agencies and third parties, an issue which has scuttled previously agreed investments from Chinese companies.

Saab owner Spyker Cars NV signed a deal with the Chinese car distributor Pangda in May worth up to 110 million euros that involved setting up a joint venture with Spyker and a partner in China to start making Saabs there within two years.

Beijing follows a strict and price-sensitive policy when it comes to outbound acquisitions, which means gaining Chinese clearance could still prove difficult.

Failure to secure approval scuttled Sichuan Tengzhong Heavy Industrial Machinery's bid for General Motor Co's Hummer in 2010.

Saab has been chasing several deals to resolve a cash crunch that halted production for seven weeks this year, and despite the deal announced with Pangda in May and a resulting 30 million euro payment, production was halted again last week.

The company has said it will keep production lines halted this week as it looks to secure an agreement with remaining suppliers and as it negotiates more funds.

Under Monday's deal, Youngman will take a 45 percent stake in the manufacturing joint venture in China, Saab 45 percent, and Pangda 10 percent. Youngman will also take a 33 percent stake in the distribution joint venture, with Pangda holding 34 percent and Saab 33 percent.

Youngman will pay 136 million euros at 4.19 euros a share to take a 29.9 percent stake in Spyker on a fully diluted basis, Saab said in a statement. Pangda will hold a 24 percent stake in Spyker and will invest 109 million euros in the firm.

A Swedish paper reported previously that Saab will close a deal to sell its factory buildings this week, providing the firm with about 280 million Swedish krona ($44 million) in cash.

"All of the pieces of the puzzle are not yet in place, but it looks good and the atmosphere is positive," newspaper Dagens Industri quoted a source as saying on Monday.

Saab declined to comment on the timing of a real estate sale, in which it plans to then lease the buildings back, but said it was working hard to bolster its finances and reach agreements with suppliers to restart production soon. "We have 10,000 orders waiting," Saab spokeswoman Gunilla Gustavs said.

Reuters