Saab owner Swedish Automobile said it has terminated a 245 million euro ($340 million) investment deal with China’s Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co., after the Chinese companies offered to buy Saab instead of sticking to the original deal to invest in its parent company.
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Youngman and Pang Da signed a non-binding memorandum of understanding in July to take a combined 53.9 percent stake in Swedish Automobile for 245 million euros. The Chinese companies say circumstances have changed since the July agreement was signed and they now want to purchase shares in Saab itself to achieve a takeover of the automaker.
Swedish Automobile CEO Victor Muller said last week that the offer was unacceptable because it would trigger every conceivable change of control clause and that would possibly mean the end of Saab. Muller would not disclose the value of the offer.
The Dutch company said on Sunday it has now terminated the agreements after Pang Da and Youngman failed to confirm their commitment to the equity investments and to a second deal over bridge funding.
In a statement, the company said that the two Chinese investors had presented it with an alternative deal on Oct. 19 and 22, that involved them buying 100 percent of the shares in Saab. An offer Swedish Automobile said was ”unacceptable”.
The company added that discussions between the parties are ongoing.
This is the second blow to Saab’s efforts to survive after the company said Thursday that a court-appointed administrator plans to terminate a voluntary reorganization, possibly forcing Saab to exit creditor protection.
