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Just days after a deal with Hawtai fell through, Saab has secured a distribution deal with a Chinese car distribution company - Pang Da Automobile. It is understood that that Pang Da has offered €65 million for a 24% share of Saab, which would allow the company to reinstate production in Sweden, and secure the health of the business for the medium term. In addition to the equity stake, Pang Da has agreed to pay €30 million for an unspecified number of vehicles and a further €15 million of further vehicles at some point during the next month. Only three weeks ago, Pang Da floated on the Shanghai stock exchange, to improve its financial position and help standardise its operations.
By the end of 2010, Pang Da owned or had a controlling influence in nearly 1,200 sales outlets across 23 provinces, cities and autonomous regions within China and Mongolia. The company already distributes Subaru, Audi, Mercedes, Toyota, Honda and numerous other commercial and industrial brands, and it has been suggested that in this instance, Saab and Pang Da will establish a JV company to distribute Saab vehicles in the Chinese region. Furthermore, should the relationship prove successful, there may be an additional JV for manufacture and production of vehicles cars in the country.
The Saab-Hawtai deal, which was worth €150 million, broke down because Hawtai was unsuccessful in rallying enough support from shareholders to go through with the transaction, although at the time of the announcement there was much speculation about the Chinese government refusing to grant approval for the bailout.
Author: Mike King, Analyst
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