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China's Pangda and Zhejiang Youngman seek approval for 54% Saab stakeStruggling Swedish brand also close to getting loan to avert collapse
September 1, 2011 14:30 CETPangda Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co. will seek approval from China's top economic planning agency this month to invest in Saab.Pangda, China's biggest dealer by market value, and automaker Zhejiang Youngman agreed in June to buy a combined 53.9 percent stake in Saab for 245 million euros.
"We're optimistic about the deal getting approval from NDRC as we believe it is in line with government policies," Wang Yin, Pangda's board secretary, said in a telephone interview, referring to the National Development and Reform Commission.
The two companies plan to submit the application in the next two weeks, he said.Saab is close to getting a loan of about 1 billion kronor ($157 million) to pay overdue salaries and avert a looming bankruptcy, three people familiar with the matter told Bloomberg News.
The loan would be provided by one of the five-biggest European banks, said one of the people, who declined to be identified because the talks are private. The loan will likely be announced as early as today, the person said.
Saab is betting the funds will hold it over until Chinese regulators approve Pangda and Zhejiang Youngman as investors.
The two companies have yet to set a time to submit an application to the Ministry of Commerce, Wang said. Overseas investments by Chinese companies require approval from various government agencies include the industry planner, trade and foreign currency regulators.
First-half lossSaab owner Swedish Automobile said on Wednesday its first-half loss widened to 202 million euros from a loss of 21.9 million euros a year earlier.
"Right now, the focus of Saab management is on working as hard as possible to bring the company back into calmer waters by significantly strengthening our financial position, reaching agreement with all our suppliers on payment and delivery terms and restarting production as soon as possible," CEO Victor Muller said. "We are evaluating all available options in order to secure continuity of Saab Automobile."
With the new financing, Saab aims to pay suppliers and then restart production in a few weeks.
Swedish Automobile has suspended the planned sale of its Spyker sports-car unit to CPP Global Holdings, a U.K.-based firm controlled by Russian banker Vladimir Antonov, it said Wednesday.
Saab, which General Motors Co. sold in 2010, first suspended production in late March amid a cash crunch, and its factory in Trollhaettan, Sweden, has been shut since early June.
Saab delayed paying wages last week, the third consecutive postponement in as many months, prompting labor leaders to start a process that may lead them to seek a bankruptcy declaration against the carmaker if wages aren't paid.
"They need the money immediately," Tom Muller, an analyst at Theodoor Gilissen Bankiers in Amsterdam, Netherlands, said Wednesday. "I hope they solve it this week, otherwise I think it's over for Saab. It's a very dire situation."
Swedish Automobile rose 9 cents, or 13 percent, to 77 cents in Amsterdam trading Wednesday. The shares have dropped 78% this year, valuing the Zeewolde, Netherlands-based company at 17.9 million euros ($25.8 million.)
Source: Bloomberg