Saab in $221m deal with Hawtai Motor
Updated: 2011-05-04 07:56
By Aaron Gray-Block (China Daily)
Victor Muller, chief executive officer of Spyker Cars NV and chairman of Saab Automobile AB, at the New York International Auto Show last month. Andrew Harrer / Bloomberg
AMSTERDAM - Spyker Cars NV said on Tuesday that China's Hawtai Motor Group would invest 150 million euros ($221 million) in the Dutch firm's ailing Swedish brand Saab Automobile AB in return for shares, enabling Saab to pay bills and resume production.
The deal is the second time that a Chinese company has helped to bail out a Swedish carmaker. Geely Holding Group, China's largest private-run carmaker, agreed last year to buy Ford Motor Co's Volvo car unit.
Saab's production has been halted for several weeks after the company ran into a cash crunch and was unable to pay its suppliers.
Spyker said Hawtai will pay 120 million euros for a 29.9 percent stake in the company, and has agreed to pay a further 30 million euros in the form of a convertible loan with a six-month maturity and a conversion price of 4.88 euros a share.
Saab said the transactions are subject to approval from Chinese government agencies, the European Investment Bank, and the Swedish National Debt Office.
"With Hawtai's clean-diesel engine technologies and production capacity, and its ambitious development programs, we have found the right partner to develop the Saab business and build a solid relationship," Victor Muller, chief executive officer of Spyker and chairman of Saab, said in a statement.
As part of the transaction, Muller's investment firm Tenaci Capital will also convert 42 million euros of its current loan to Spyker into shares at 4.88 euros a share to help reduce Spyker's interest burden.
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