Saab/Spyker enters partnership deal with China's Hawtai Motor Group

By Editors on May 3, 2011 4:17 PM

Struggling automaker Saab has taken one more step to ensure its viability with the announcement that its parent company, Spyker Cars, has signed an agreement with the Hawtai Motor Group, Ltd. News of the strategic alliances partnership came just one day after Saab confirmed that it had secured life-saving short-term funding of €30 million ($44.5 million) as part of a convertible loan agreement with Gemini Investment Fund Limited (Gemini). Under terms of its subsequent deal with Hawtai, which is based in Beijing, the Chinese producer of passenger vehicles, diesel engines and automatic transmissions will invest roughly €150 million ($226.2 million) in the combined Saab/Spyker operations, 80 percent of which will go towards taking up to a 29.9 percent direct equity position in Spyker and the remaining €30 million ($44.5 million) being used to fund a convertible loan at seven percent and with a six-month maturity period. All terms of the agreement are subject to approval by various Chinese and European regulatory authorities, but the deal appears likely to be finalized within the next six to 12 months.

Victor Muller, CEO of Spyker and Chairman of Saab Automobile, noted that: "The partnership with Hawtai allows Saab Automobile on the one hand to continue executing its business plan since we secured the required mid-term financing subject to meeting certain conditions, whilst on the other hand it allows Saab Automobile to enter the Chinese car market and establish a technology partnership with a strong Chinese manufacturer.

Richard Zhang, Vice President of Hawtai, said: "This is a great day for our relatively young company which was founded 10 years ago. The partnership with the iconic Saab brand will give us access to innovative technologies and an international network which would have taken us decades to build. On the other hand we have a very strong Chinese manufacturing and distribution infrastructure which we will make available to our new partner Saab Automobile. Our participation in Spyker, Saab's parent company, demonstrates our commitment to the future of Saab Automobile as a premium European car manufacturer."