Saab finalizes a 100 Million-Euro deal with Chinese companies Pang Da and Zhejiang Youngman Lotus

Swedish car manufacturers, Saab Automobile AB, more commonly known as SAAB, have announced that the Chinese Automobile giants Pang Da Automobile Trade Co., Ltd and Zhejiang Youngman Lotus Automobile have agreed to purchase the company assets,
liabilities and equities for 100 Million Euros.

The process of the acquisition has started and is expected to complete at the end of the current fiscal year.

“Swedish car maker Saab may finally have secured its future after Chinese groups Pang Da and Youngman agreed to buy the company for €100m”, a company official stated in a press conference.

Saab filed for bankruptcy protection on September 7 this year after failing to pay approximately 18.4 Million Euros in debts in more than 90 cases. The government of Sweden however; rejected Saab’s petition, stating that the company can manage to pay the
loans.

Saab started negotiations with Youngman and Pang Da for the acquisition, tabling an initial offer of 245 Million Euros but after a string of meetings the deal boiled down to 100 Million Euros. The acquisition includes Saab Automobiles and its United Kingdom
dealer network from Swedish Automobile.

This however, is not the first time Saab is looking for bankruptcy protection. In fact, this the second time in three years that the Swedish car manufacturers, who are Royal Warrants as well, have filed for Chapter 11 protection.

General Motors purchased the beleaguered manufacturers in 1989 and then sold then to Spyker (Dutch Automobile manufacturers) in 2010 after deciding not to subsidize its continuing losses.

Saab announced in August that they were unable to pay labour wages and were filing for Chapter 11. After government rejected its petition, its labour unions, Unionen and Swedish Organization for Managers (Ledarna) submitted a request to the government for
liquidation of Saab’s assets to pay 10.9 Million Euros in wages.

However, acquisition by Pang Da and Youngman in desperate times like this is a sight for the sore eyes.

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Posted by Usman Khalid on Oct 31 2011. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry