Chinese car makers Pang Da and Youngman today agreed to buy Saab in its entirety from Swedish Automobile.
It's the latest extraordinary twist in the saga of Saab, which has been technically bankrupt since September 2011 and built just 11,000 cars this year. The deal, which will see the Chinese car makers pay €100 million for Saab, has not yet however been signed and sealed.
The memorandum of understanding announced today is valid until 15 November 2011. Chairman of Saab Victor Muller today said he hoped the deal would be closed and in place in one month's time. 'I am confident approval will be granted this time,' he said.
Sounds like MG Rover going east...
It does indeed. In a conference call with CAR this afternoon, Muller said that Pang Da and Youngman had bought 'the last independent premium rival to the likes of Audi, BMW and Mercedes.'
The €100m fee will be paid in instalments over four years. It will go to cover Swedish Automobile's liabilities, but not the staff or suppliers of Saab. A lot will be swallowed by advisors and loans, Muller admitted.
But there are many obstacles ahead before Saab is home and dry. It must be approved by regulators in Europe and China - and GM, which retains a stake in Saab and supplies many components (and indeed the 9-4X lock stock and barrel), must also give its blessing.
The administrator in Saab Automobile’s voluntary reorganisation, Guy Lofalk, has withdrawn his application to exit reorganisation. Might this deal actually work for Saab?
What does the Chinese deal mean for the future of Saab?
'Saab will remain in its current market position with our existing products,' Muller promised. 'We are moving up in the premiumness of its brand.' Muller went on to refer to the new 2013 9-3 - and then a proposed 9-1, 9-6 and 9-7. He's talked up future product before, but we suspect new models are some way off. However, larger cars for China would make sense long-term.
When asked if Saab would remain in Sweden, he replied: 'Absolutely. There are no plans to move production.' We suspect the new owners may have other plans, but as yet Pang Da and Youngman's intentions for their Swedish acquisition remain shrouded in mystery.
Who will lead the new Saab?
But Muller's own future is uncertain. He will continue as caretaker manager until the new owners are fully onboard, he said. The search for a CEO after Jan-Ake Jonsson stepped down was hampered by Saab's financial performance, but Muller said he was confident a strong leader could now be found.
Muller, who owns around a third of the stock in Swedish Automobile, said the Saab crisis had left him shattered. He's much poorer too. 'I have lost a lot of money in this,' he admitted. 'My initial share price was much higher than it was today.'
He's not the only ones out of pocket from this deal. Other shareholders include investment funds in the Middle East and Gemini.
Muller is going to be a busy man. He admitted the deal to sell Swedish Automobile's other asset - Spyker - had stalled during the rush to save Saab.
Saab collapse: the background
It's been a long, intriguing tale. Trollhattan has capacity for 190,000 vehicles a year, but the new independent company had hoped to build just 80,000 in 2011.
In the event, sales were too weak and bills mounted - meaning they could only afford to build 11,000 cars before the production lines fell silent in April 2011. They never started up again.
Even if all the suppliers and other creditors were paid on Monday, it is unlikely that Saab could restart production this year. Muller said: 'We will present a business plan to creditors and suppliers on Monday. But from final payment to restart production would take at least eight weeks.'
1 March 2011 - Saab Phoenix concept (2011) at Geneva motor show
5 April 2011 - Latest Saab production halt raises concern
11 April 2011 - Saab's latest factory shutdowns 'just a blip'
16 May 2011 - Saab announces new China Joint-venture
16 June 2011 - Saab 9-5 Sportwagon (2011) prices and revised 9-5 range
24 June 2011 - Saab unable to pay wages as financing crisis deepens
27 June 2011 - Saab secures more funds as it seeks to avert collapse
28 October 2011 - Saab is sold again: two Chinese makers buy Saab
1 November - Saab 9-3: is this the new 2013 hatch