Press Release: Saab and Spyker Enter Into MOU With Pang Da Automobile

Saab Automobile and Spyker Enter Into MOU With Pang Da Automobile On Distribution/Manufacturing Partnership For China And Equity Participation

Trollhättan, Sweden – Spyker Cars N.V. (Spyker) announces today that Spyker and Saab Automobile AB (Saab Automobile) signed a Memorandum of Understanding (MoU) with Pang Da Automobile Trade Co., Ltd (Pang Da), China’s largest publicly traded automobile distributor with over 1100 dealerships nationwide. The MoU includes a strategic alliance consisting of a 50/50 distribution joint venture and a manufacturing joint venture (MJV) for Saab branded vehicles as well as for an MJV-owned brand (the so-called ‘child brand’) in China. Saab Automobile will have up to 50 percent in the MJV, with Pang Da and a to-be-selected manufacturing partner owning the remaining shares.

Pang Da shall make a EUR 30 million payment for the purchase of Saab vehicles and is expected to make an additional EUR 15 million for the purchase of more Saab vehicles within 30 days subject to certain circumstances. Additionally, Pang Da will take an equity stake in Spyker for a total amount of EUR 65 million at EUR 4.19 per share (the weighted average of the ten last trading days), representing 24 percent 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.

* Spyker, Saab Automobile and Pang Da signed an MoU on the formation of a joint ventures with respect to distribution and manufacturing in the Greater China market, subject to definitive transaction documentation and certain regulatory approvals.

* Pursuant to the MoU, Pang Da will transfer EUR 30 million to Saab Automobile as payment for the purchase of Saab vehicles and an additional EUR 15 million within 30 days for the purchase of additional vehicles depending on certain circumstances.

* Pang Da will take an equity participation in Spyker for a total amount of EUR 65 million at EUR 4.19 per share representing up to 24 percent of Spyker’s outstanding share capital on a fully diluted basis.

The MoU between Spyker, Saab Automobile and Pang Da contains the principles on which the parties will establish a 50/50 joint venture for the distribution of Saab-branded vehicles in China.

The EUR 65 million share subscription by Pang Da will secure Saab Automobile’s medium term funding.

Some of the transactions following the MoU are subject to agreement on definitive transaction documents and certain conditions, which include consents from certain Chinese governmental agencies, the European Investment Bank, GM and the Swedish National Debt Office.

With the receipt of Pang Da’s EUR 30 million 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. In order to improve lead times to customers and dealers on existing and future orders, Saab Automobile will work together with its suppliers to minimize 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-capitalized 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 finalize 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.”

Mr. 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, such as the all new Saab 9-5 and the Saab 9-4X which have been widely acclaimed, and not in the least the upcoming successor to the current Saab 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.”

tobbe
Member
5 years 4 months ago

Hope this will work this time…!

Audun
Member
5 years 4 months ago

It has to work! 🙂

thor
Member
5 years 4 months ago

great news well done Victor

900 classic cab
Guest
5 years 4 months ago

Well, at last someone is interest in SAAB which is good. Distribution is great, as for manufacturing…we have to wait and see. I want SAAB to live !

kaiger
Member
5 years 4 months ago

Ok sense of positivism. BUT we have to wait another week (or couple of more) if they (have to) broke this MOU again or not…

leinad
Member
5 years 4 months ago

Congratulations Victor ! The MOU sounds good. With this partner I have a better feeling about intellectual property because it seems to be more focussed on distribution.

Coke is it
Member
5 years 4 months ago

Good news, I hope VM can get this deal to work out.

saab93f
Member
5 years 4 months ago

This is good. Well done Victor!!

TonymacUK
Member
5 years 4 months ago

But the EIB is still in the mix – and where are Hawtai – is that now dead and buried? The EIB obviously do NOT want Antonov anywhere near SAAB, so we can`t count on his offer, but is that offer still being considered?

kochje
Member
5 years 4 months ago

Agree for 100% with your short but meaningful comment.
VM has an enormous energy that he puts in his strategic view; make Saab a strong company and do that in a different way.

Knape
Member
5 years 4 months ago

Just saw it on the news! Very good job everyone! 😀

Bravada from GMI
Member
5 years 4 months ago

The good thing in China is that you can never run out of obscure car companies. Let’s keep fingers crossed it works out this time…

saab93f
Member
5 years 4 months ago

“China’s largest publicly traded automobile distributor with over 1100 dealerships nationwide.”

That should not be an obscure entity. Imagine if each dealership sold just 100 Saabs a year 🙂

Bravada from GMI
Member
5 years 4 months ago

It is obscure from a Western point of view, I am a bit tongue-in-cheek here. I am afraid the Pang Da dealerships would sell 100 “MJV brand” cars a year rather than Saabs.

saab93f
Member
5 years 4 months ago

I see your point. However I´m quite confident that the Chinese have a great sense of brand awareness – otherwise there would not be joint-ventures with players like MB or BMW methinks.

What I like the most about this deal is that the Chinese partner is as quoted the LARGEST publicly traded car distributor. It´s thus not like dealing with an also-ran.

till72
Member
5 years 4 months ago

If they pay 30 or 45 million for Saab cars they will most likely want to sell it…

sala or bust
Guest
5 years 4 months ago

Those money might be just get 1 or 2 saabs in every showroom! If so, start production!.

Tim
Member
5 years 4 months ago

I have read somewhere that Pang Da imports over 70 brands. So I guess it’s a pretty big and well known company in the car industry.

JH
Member
5 years 4 months ago

A sigh of relief… 🙂

Cerulean
Member
5 years 4 months ago

“…as well as for an MJV-owned brand (the so-called ‘child brand’) in China.”

Are they talking about a new co-developed sub-brand for sale only in China?

Bravada from GMI
Member
5 years 4 months ago

This will only work if the “manufacturing partner” is BAIC, imho.

Audun
Member
5 years 4 months ago

Why?

leinad
Member
5 years 4 months ago

I guess this deal will not fail because VM has learnt about the mistakes in the Hawtai affair. Congratulations Victor !

Osama Dajani
Member
5 years 4 months ago

SAAB & Spyker have just signed a “Memorandum Of Understanding”,
Let’s wait until the final deal is finalized and signed off.

Hoping to celebrate once the production re-commences and hoping to see more SAABs on the roads.

Best Wishes,

Osama Dajani
Member
5 years 4 months ago

Is Vladim Antonov, or Gemmi involved in the deal?

StefanH STHLM
Member
5 years 4 months ago

This must mean that Victor pulled out a smart Joker in the shape of a giant vehicle purchase, to get around the obstacle of getting a new owner aproved by authorites. Very clever! 🙂

Audun
Member
5 years 4 months ago

+1 🙂

Audun
Member
5 years 4 months ago

TTELA: “En presskonferens kommer att hållas klockan 10 svensk tid.”

rask
Member
5 years 4 months ago
Congrats! Howver, what about the existing agreement for distribution in China. Who was that with and what will that amount to? How does this deal compares with the Hawai one? Seems this one doesn’t bring in as much money, or am I right? Sorry to put some gloom on the situation… It’s great news for sure, but I would guess Saab needs about 50€ million just to restart production. 30€ million is in the bank already (from Gemini), but some 30€ million more from China and only about 65€ million more for the “deal”. Half the money that the Hawai… Read more »
SAABNUT
Member
5 years 4 months ago
Again the idea of entering the worlds largest automobile market – with widespread distribution and together with a solid partner and eventually local production in order to get within the custom barrier of China, is the obvious and right step for SAAB. The investement in SAAB must be considered as a bargain – the chinese partner get access to world class technology and know-how, which will save them hundreds of millions of EUROS if compared to starting from scratch and develop it on their own. As a SAAB enthusiast I still hope for an independent SAAB, having its epicenter in… Read more »
Audun
Member
5 years 4 months ago

+1

MrTinkertrain
Member
5 years 4 months ago

I am a bit cautious with that news, I did not find the brand even by google. But I still hope that this will work as real solution. Keep fingers crossed.

SAAB_Andee
Member
5 years 4 months ago

It´s no car brand – Its one of the biggest distributors and car dealer of china .
And if you can read between the lines of this press relase they already have ordered cars of an amount of 30 mio euro. for the first step. and are able to purchase cars for 15mio eur within the next 30 days. so saab has sold aprox 1800 cars in this deal
(for 1100 dealerships). The car purchase needs no approval through NDO and EIB and swedish state

the joint venture has to be approved first

Cri
Member
5 years 4 months ago
I do not want to be negative here, but no website exists for this Pang Da company – all I get in Google search is traditional Chinese medicine used as laxative and rash. The website mentioned in the press release cannot be accessed. I would rather have patience until Great Wall or another more serious company can get all necessary approvals in order to enter a business with SAAB. Announcing MoUs every 2 weeks affects credibility and image very seriously. If we want to sell cars and be profitable it takes more than SAAB fans as customers, infinitely much more… Read more »
Allan
Member
5 years 4 months ago

This is indeed great news. This deal appears better than the previous one.

michaelb
Member
5 years 4 months ago
Given the fact, that the present Spyker owners will give away 24% of equity for a relatively modest amount of fresh capital (65m EUR), and that the 30m EUR is just upfront cash for cars to be delivered some months later, it gives the impression as if Spyker shareholders have the idea that funding issues are or will be resolved (soon). Aside from the fact, that we are talking just of a Memorandum of Understanding, which is legally not binding, this is surprising. Where the heck that optimism? Do they know something about the EIB’s decision? Do they have sufficient… Read more »
aero
Member
5 years 4 months ago

I read this as something very positive. At least EIB cant stop Saab from selling prepaid cars!

Congratulations all involved!

saab93f
Member
5 years 4 months ago

Smart move by Victor. 30 or 45 Meur will give them some breathing space and with that 65 Meur things should return to normalcy.

Peter, Sweden
Member
5 years 4 months ago

But how much of the 30 mEur will Saab be able to use, as cash? I mean, Pang Da is going to buy cars for 30 mEur (1800-ish cars) — how much is Saab’s profit on 1800 sold cars? It can’t be that much.

hogge
Member
5 years 4 months ago

I can’t find this company on wikipedia or google.
Can anyone dig up anything about it?

Audun
Member
5 years 4 months ago
Tripod
Member
5 years 4 months ago

Hogge,
We are talking about companies in China, in this case a distributor with a service network, and people complain that they can’t find anything on Wikipedia or Google? Google index what it is allowed to index; that wiki-thingy contains stuff that someone has found worth writing about, necessarily not correct, and definitely not covering everything.

As mentioned, Swade has written a little about it.

bert
Member
5 years 4 months ago
hope hat the clever trick of buying cars instead of loans will stand up to the scrutiny of all parties involved. In a way it is of course a loan where by the pay back installments are cars so pay back in goods and not cash. There is far to little communication/information on the position of the comapny vis a vis EIB and also vis a vis antonov. The powerplay/ gambling first with the swedish creditors inspired in his own words by VM and now hopping from one MOU to an other does not have a very high flavour of… Read more »
JvDNLS
Member
5 years 4 months ago

It was just on the radio news. great news. Move on!!

Jos
Member
5 years 4 months ago

Seems this one doesn’t bring in as much money, or am I right?

That depends how you look at it. It;’s a Brilliant move IMHO, becuase as I read it, PangDa directly puts an order in for 30Million€ worth of new cars, thus the possible avoiding delay by regulatory approvals (which would be tha case if they merely wanted to enter an ownership relation) but allowing to inject a heap of cash into SAAB directly, and allowing them to start up the plant. This has the biggest priority.

sandborg
Guest
5 years 4 months ago

If I ever go to jail I want Victor to represent me. This guy is really good.
Each time I drive my SAAb I get why this brand should continue.
It amazes me I never get bored with the car—-even after 5 years.

RS
Member
5 years 4 months ago

What ever it takes to get the factory going. I sure hope the suppliers are willing to smoke the peace pipe with Saab (one more time) and start the deliveries asap. I have a feeling Saab wont forget those who pulled in the same direction -when the company is selling 200.000 Saab-Saabs worldwide, Trollhättan is running at full steam and making the suppliers very happy they stayed on board during the difficult first two years of independence.

Niklas G
Member
5 years 4 months ago

Great news!
Fingers crossed for everything to work out this time!

Good also that there apparently are several interesting companies. We need some healthy competition to help Victor secure a deal that also is a really good deal for Saab and Trollhättan. 🙂

paddan
Member
5 years 4 months ago

A nice way to start the week. Well done VM. Keeping fingers crossed for a long, prosperous and mutually satisfying business relationship.

turbokalle
Member
5 years 4 months ago

Congratulations Mr Muller!
This deal seems simular to the one Saab made with Philipssons back in the 1950`s. Money up front for cars they wanted to sell.

SAAB_Andee
Member
5 years 4 months ago

It would also make sense to make such a deal for example with Beherman for a quick cash injection.
they sell about 500cars a month (belg and nl)

xlx
Member
5 years 4 months ago

afaik if a chinese company owns a part of an western automaker, part of the production must be in China, is that correct ? they are a distributor but with shares at Saab they become automaker, does that mean a production plant in China ? Or are there more parts of the puzzle which remains hidden …

BTG88
Member
5 years 4 months ago

Pang Da is a distribution company, not a manufacturer, so production does not need to be in China.

Having worked and lived in China for years, I can see Pang Na looking into a future where they are not only the largest auto distributor, but also have a manufacturing facet to their business, thus vertically integrating their business and diversifying at the same time. If it all works out, this is good news for Saab.

Thylmuc
Member
5 years 4 months ago

Amazing how VM never seems to run out of business ideas, and how he is able to build bridges, not destroy them.

I wonder wether this order will get priority treatment at the factory. After all, they can hardly take the money and then use it to pay supplies for other clients’ cars.

Thylmuc
Member
5 years 4 months ago

I mean that is what they need to do to pay their debts, but will the next round of deliveries after the suppliers are payed and restart delivery be used to build China-targetted cars?!

eduardo_spain
Member
5 years 4 months ago

I am really happy to read this news eventhough I have not had the time to go through the details. Thanks Victor, I hope this time we won´t be frustrated again in a couple of days. It is clear that the future of many car companies lies in China and in order to survive Saab needs to sell cars there, so it seems an encouraging solution. Now the next news I want to read is when the production will get started again.

Stephen Goldberger
Member
5 years 4 months ago

A little late for post-mortem on the Hawtai deal, and way late for a pre-mortem comment, but this just crossed into my awareness. Note the insight and the source

http://www.chinacartimes.com/2011/05/09/why-the-saab-hawtai-deal-is-likely-to-fail/

zippy
Member
5 years 4 months ago

I will celebrate once the relevant authorities have signed on the dotted line. Saab needs long term financing to survive though and that’s not even on the radar.

Stephen Goldberger
Member
5 years 4 months ago
“Long term financing” needs to come from vehicle and technology sales, not from investors. If that is not forthcoming, no amount of deal making will save them. But in the short term, they need to get production going. If 80,000 vehicles really does bring them to break-even, as has been said, then a return to their traditional 120,000 unit volume should bring good money. Peter Augustsson once told me that costs were roughly 1/3 factory overhead, 1/3 engineering, and 1/3 purchased supplies and components (cost of goods sold). So 40,000 units, with a half to two thirds of the wholesale… Read more »
Bravada from GMI
Member
5 years 4 months ago

Well, now it’s apprently 50% supplies and components, 20% factory overhead, 10% development and the remaining 20% is other overhead (admin, sales costs). Figures taken from Spyker’s annual report. Saab is incurring considerable costs to build every unit – straight accounting gives figures of up to EUR 22K per vehicle, but this probably isn’ t the case, as there would have been virtually no margin left.

Bravada from GMI
Member
5 years 4 months ago

I am sorry, I mixed up my accounting. The EUR 22K figure refers to REVENUE per vehicle (so now you know how much your dealer’s making on selling one to you 😉 ), the straight material/component costs are around EUR 16K (EUR 12K if you take out internal settlements with Saab Parts).

davidgmills
Member
5 years 4 months ago
Just yesterday I was bitching about no news on SU about what was happening with Saab. I guess I need to eat some crow. We shall see if this turns into a real agreement. But this agreement makes sense to me. I initially thought last year that Saab should go to Roger Penske in the United States for the same reason as Saab has now gone to this Chinese company. Penske had tried to acquire Saturn but finally backed out of any deal because Penske was a distribution firm and not a manufacturing firm. Penske wanted nothing to do with… Read more »
SAAB_Andee
Member
5 years 4 months ago
@david please don´t speculate too much and read the press release carefully the pangda deal is much better than the hawtai deal. first of all – saab isn´t owned by a chinese company – they only would have 25 % they only sold 1300 cars…. no phoenix ,no technology… the joint venture with 65 mio euro has to be approved by EIB and NDO – but they have still to announce and make a deal with another chinese car manufacturer. VM really made the best thing he could with the strong regulations from EIB and Sweden. sell cars. SO he… Read more »
solvy
Member
5 years 4 months ago

“he sold 1300 cars on one weekend…”

vm should offer a sales training for some dealers 😉

davidgmills
Member
5 years 4 months ago
davidgmills
Member
5 years 4 months ago

Pang Da website:

http://www.pdqmjt.com

davidgmills
Member
5 years 4 months ago
SAAB_Andee: Did you read what I said? Apparently not. I am well aware that Pang Da did not buy Saab. Not Yet. Maybe never. But if it happens, 25% can easily turn into a 100% when the company is in dire financial straits. And of course it is a much better deal than Hawtai. How could you interpret what I said any other way? Of course this purchase of stock is also conditioned on the sale of Saabs which may or may not take place. Apparently, some claiming to know Chinese deals, say that a Chinese MoU is next to… Read more »
davidgmills
Member
5 years 4 months ago
suth
Member
5 years 4 months ago

Ok, so how many Saabs does EUR 45 mil. buy??

wpDiscuz