Saab Automobile owner Spyker Cars on Monday announced a planned strategic alliance with Pang Da Automobile Trade Co, China’s largest publicly traded automobile distributor with over 1100 dealerships nationwide.

A memorandum of understanding signed by Spyker, Saab and Pang Da is for a 50/50 distribution joint venture and a manufacturing joint venture (MJV) for Saab brandvehicles as well as for an MJV-owned brand (a so-called 'child brand') in China. Saab Automobile will have up to 50 percent in the MJV, with Pang Da and a yet-to-be-selected manufacturing partner owning the remaining shares.

Pang Da will make a EUR 30m payment for the purchase of Saab vehicles and is expected to pay an additional EUR15m for the purchase of more within 30 days subject to undisclosed conditions.

Pang Da will also take an equity stake in Spyker of EUR65m at EUR 4.19 per share (the weighted average of the 10 last trading days), representing 24% of Spyker on a fully diluted basis, and will have the right to nominate a member of the supervisory board of Spyker and/or the board of Saab Automobile.

The agreement is subject to consents from Chinese government agencies, the European Investment Bank, former Saab owner General Motors and the Swedish National Debt Office.

"With the receipt of Pang Da's EUR30m initial payment, Saab Automobile aims to come to an agreement on payment and delivery terms with its suppliers as it secured the liquidity that is required to restart production as soon as possible," Spyker said in a statement.

"In order to improve lead times to customers and dealers on existing and future orders, Saab Automobile will work together with its suppliers to minimise any impact from the recent production stop."

Victor Muller, CEO of Spyker and Saab Automobile said: "Both parties are confident that this partnership allows Saab Automobile and Pang Da to create a strong business, initially in the distribution and subsequently in the manufacturing of Saab vehicles in China.

“Pang Da is a forward-looking, profitable and well-capitalised public company that, as the single largest automobile distributor in China, sees enormous potential for our brand in their home market. We will work hard to finalise the relevant agreements and firmly establish Saab in the world’s fastest growing car market. Pang Da taking a substantial equity stake in Spyker underlines their confidence in our plans for the future and China in particular."

Pang Qinghua, CEO of Pang Da, said: “This partnership allows us not only to distribute Saab, the iconic European premium brand, in China but also to set up a manufacturing joint venture which will further enhance the competitive position of the Saab brand in China.

“With the new products Saab has launched since it became an independent car manufacturer early last year, and not in the least the upcoming successor to the current 9-3, we believe the timing is perfect for Saab to enter the Chinese market. Our size, financial strength and competence in addition to our ability to move fast will be crucial to Saab’s success in China.

"Having just gone public ourselves three weeks ago, we are delighted to have the opportunity to become a substantial shareholder in Spyker, Saab's parent.  We very much look forward to collaborating with Saab's management to successfully enter our promising home market.”