China's Pang Da, Youngman Lotus to Buy Saab
In an apparent reversal of his earlier position, Victor Muller has agreed to sell Saab to Pang Da Automobile and Zhejiang Youngman Lotus Automobile for €100 million ($142 million).
Earlier this week Muller had announced his intention to back out of a deal under which the two Chinese firms were to provide about $350 million in investments.
Under the new deal the Chinese firms would buy 100% ownership of Saab with the proviso that they would invest an additional €500 million ($700 million) to allow Saab to complete its reorganization in bankruptcy court and emerge as a functioning business. Muller has also agreed to stay on as Saab CEO until a new CEO is appointed. The €100 million will be paid in installments.
Earlier this week bankruptcy court administrator Guy Lofalk had filed an application to move Saab into liquidation after a series of delays in receiving bridge financing to proceed with restructuring, which entailed paying off certain portions of debts owed various creditors. The court had been set to rule on the application Friday. Lofalk has withdrawn the application in light of the new deal.
The memorandum of understanding on the purchase deal will remain valid until Nov. 15, provided Saab stays in reorganization.
The deal has “secured the future of Saab,” Muller told Sweden’s Sverige Radio, adding that Saab can now pay its creditors, restart production, launch new models and expand into China.
The agreement is subject to approval by the Chinese government as well as Swedish authorities as well as a formal agreement by the boards and shareholders of both Saab owner Swedish Automobile and the two Chinese firms.
After Saab went into bankruptcy for the second time in September Youngman and Pang Da had agreed with Swedish Automobile to take a combined 53.9 percent stake for 245 million euros ($340 million). Since then the Chinese firms began maneuvering the deal toward an outright purchase. That effort had been quashed by Muller as recently as this Wednesday when he said the deal with the Chinese firms had lapsed due to their refusal to provide the bridge financing necessary to complete the restructuring.
At the time Muller appeared to be looking for $70 million in financing from U.S. private equity firm North Street Capital to which he had sold his custom sports car maker Spyker Cars for €32 million ($43.5 million) in September.