Saab Automobile has signed a EUR150m (US$222.5m) agreement with Hawtai Motor Group to produce and sell Saab cars in China.
Hawtai is a former partner of Hyundai and produces vehicles based on South Korean technology for the Chinese domestic market. It is based in Shandong province.
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Under the agreement, Hawtai will invest EUR120m for up to a maximum of a 29.9% stake in Spyker and provide a EUR30m convertible loan to Saab.
Victor Muller, chairman of Saab owner Spyker, said the partnership with Hawtai allows Saab to continue executing its business as it has now secured the required midterm financing subject to meeting certain conditions. Production in Sweden is expected to re-start within a week.
He added: “It also allows Saab to enter the Chinese car market and establish a technology partnership with a strong Chinese manufacturer.”
The strategic alliance includes joint ventures on manufacturing, technology and distribution. The convertible-loan agreement will have a six-month maturity with an annual interest rate of 7% and a conversion price of EUR4.88 a share.
The deal is subject to agreement from Chinese governmental agencies, the European Investment Bank and the Swedish National Debt Office.
As part of the transaction, Tenaci Capital will convert EUR42m of its current loan to Spyker into share capital in Spyker at EUR4.88 per share, thereby substantially reducing Spyker’s interest burden.
Hawtai Automobile’s website states it has an annual production capacity of 200,000 vehicles and 300,000 engines annually. The company was founded in 2000 as a small SUV maker. It’s JV with Hyundai was formed in 2002 and Hawtai made Chinese-market versions of the Matrix people carrier, Santa Fe SUV and the Terracan large MPV. The partnership was ended last year.
The company has production bases in Erdos, Inner Mongolia, and Rongcheng, Shandong.
An associated company, OED Engine, was estabished in 2006. The company is located in Kangbashi New district, Erdos and has over 1000 employees. It claims to operate the largest and the most advanced diesel engine and gearbox factory base in China.
The company has been licensed by ltaly’s VM Motori to manfacture Euro IV emission standard diesel engines.
In 2007 the company started making four- and six-speed automatic transmissions using ZF technology.
Spyker bought Saab from General Motors in January last year but has been struggling to find funding to keep the Swedish car manufacturer running. It was forced to halt production at the beginning of April due to a dispute over unpaid bills.
