Swedish car maker Saab Automobile AB said Tuesday that takeover talks between its owner Swedish Automobile NV and two Chinese investors will continue despite the fact that a memorandum of understanding signed by the parties only runs until November 15.
“All parties have agreed to continue the discussions, but they won’t officially sign a new agreement,” said Gunilla Gustavs, spokeswoman at Saab Automobile.
The Chinese companies, Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co., signed a memorandum of understanding with Saab Automobile’s owner, Swedish Automobile, three weeks ago, in which they agreed to buy 100% of the shares in the Saab Automobile for EUR100 million.
However, General Motors Co., the former owner of the troubled Swedish car maker, objected to the deal and said it won’t continue to license its technology to Saab Automobile following the proposed change of ownership, a move that could put an end to plans of selling the cash-starved Swedish brand.
“It is vital that we can agree on a new ownership structure that GM can approve,” said Gustavs.
Saab has been operating under creditor protection while trying to restructure its operations for a second time since being put up for sale by GM in 2009. Production has been suspended since April amid a lack of sufficient funds to pay suppliers and employees.
Saab Automobile have to present a plan of how to pay off its the debt to creditors on November 22, and get it approved, to remain under creditor protection while it restructures its business.