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Saab agrees 150 mln euro deal with China’s Hawtai

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From Reuters:

Saab, Hawtai enter strategic partnership

* Hawtai to invest 150 mln euros in Saab

* CEO’s investment firm to convert loan into shares

AMSTERDAM, May 3 – Spyker Cars said on Tuesday China’s Hawtai Motor Group would invest 150 million euros in the Dutch firm’s ailing Swedish brand Saab 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’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 firm, 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 per share.

Saab said the transactions are subject to approval from certain 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,” Spyker Chief Executive Victor Muller 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 per share to help reduce Spyker’s interest burden.

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