STOCKHOLM (AP) — Two Chinese companies have reached a tentative deal to take over struggling car maker Saab for euro100 million ($141 million), the company's owner Swedish Automobile said Friday.
The move by Zhejiang Youngman Lotus Automobile Co. and Pang Da Automobile Trade Co. marks the latest rescue attempt for cash-strapped Saab, which has been fighting for survival since General Motors Co. sold it in 2010 to a small Dutch company specializing in luxury cars.
Production at Saab's manufacturing plant has been suspended for most of the year while the company has struggled to pay suppliers and staff. In September it entered a reorganization process similar to Chapter 11 bankruptcy protection in the U.S.
Swedish Automobile, the Dutch company previously known as Spyker Cars, said it had entered a memorandum of understanding with Youngman and Pang Da for the sale of all shares in Saab.
If the deal is finalized and approved by regulators it would mean that both of Sweden's car makers end up in Chinese hands. China's Geely Holding Group bought Volvo Cars from Ford Motor Co. for $1.5 billion in 2010.
"It's fantastic because the future of the company is now secured," Swedish Automobile CEO Victor Muller told Swedish Radio. "We know will have the stability and the funding to execute our business plan."
Guy Lofalk, who is in charge of Saab's reorganization under bankruptcy protection, withdrew his earlier request to terminate that process, saying the Chinese deal had improved the chances of a successful outcome.
In a document filed at the Vanersborg District Court, Lofalk said that Pang Da and Youngman had agreed to finance the reorganization as well as Saab's business plan.
"These new conditions must be investigated before a decision can me made on terminating the reorganization," he said.
The two Chinese firms had earlier agreed to invest euro245 million for a 53.9 percent stake in Saab, but the deal was held up by Chinese regulators and Swedish Automobile canceled that agreement on Sunday.
Copyright 2011 The Associated Press.