Saab says its announcement of a EUR70m (US$95m) technology licence agreement for non-exclusive rights in its Phoenix architecture is a loan that will be paid back once Chinese manufacturer Youngman comes on board.

Saab signed a technology licence agreement with a special purpose vehicle known as Swedish Automobile coöperatief UA (SPV).

As part of the transaction, Youngman has also signed a technology licence transfer agreement with the SPV on purchasing the licence and providing a guarantee for its payment of the licence.

This forms part of a bridge financing transaction. The transaction and receipt of funds by Saab Automobile are still subject to finalisation of definitive transaction documentation with the lender that will provide the bridge loan.

It is the intention to repay the bridge loan with the proceeds of the EUR 245 million equity investment of Pang Da and Youngman, which is still subject to approval of the relevant authorities.

“It is a loan that will be paid back once Youngman come on board,” a Saab spokeswoman told just-auto from Sweden. “Their investment at that point, Youngman will be part-owners in the enterprise.

“It is a loan backed up by access to the technology. The Phoenix architecture technology is the underpinning of next generation 9-3 and other vehicles – it is a way to make a bridge loan.”