M&M likely to acquire stake in Swedish auto maker Saab Automotive
12 December 2014
Mahindra & Mahindra, India's largest maker of utility vehicles and tractors, is acquiring a stake in National Electric Vehicle Sweden (NEVS), the company that owns Swedish auto maker Saab Automotive, the Dow Jones Newswires reported, citing court documents.
National Electric Vehicle Sweden (NEVS) is owned by National Modern Energy Holdings, a Chinese-Japanese energy company based in Hong Kong.
NEVS, an investment group, bought the assets of SAAB two years ago from Spyker, a Dutch supercar maker, which in turn brought SAAB from GM.
NEVS is currently under the process of reorganising the firm, and was earlier scheduled to conclude it by 29 November 2014. But the firm has since sought an extension of time to complete the process.
According to reports, NEVS is talking to two Asian OEM manufacturers to step-in as the major stakeholder, including Mahindra & Mahindra, which has already agreed to buy controlling stakes in the company while final decision is set to be out in February.
Chinese car maker Dongfeng was also in the race, according to previous reports.
NEVS took control of the auto maker by acquiring the assets of Saab Automobile, Saab Automobile Powertrain, and Saab Automobile Tools from a bankruptcy estate.
However, NEVS had ran into financial difficulties on its own, putting the company again in bankruptcy on 28 August 2014.
"Two decades of bad management and mediocre products under GM ownership, a bankruptcy in the hands of next owner Spyker and yet another one by NEVS, pretty sums up the long, sad story that is Saab," reported auto journal carscoop.com on the Swedish auto maker's history of travails.
the report added, "As if those issues weren't enough, Saab has lost the right to use the name by the Swedish defense company that bears the same name. NEVS, though, is confident that it will eventually get back the right to use the brand."
In a petition filed before a court by one of the creditors of NEVS, Mahindra was named as the auto maker about to take a stake in the Swedish company, the report said.
In a disclosure to the court last week, NEVS said talks with potential investors were close to completion. In its court filing, NEVS said it is in negotiations with an Asian original equipment maker, which plans to step in as majority owner in the company, the report said.
Mahindra had previously informed the Bombay Stock Exchange that it examines or pursues "various opportunities in different areas, from time to time on a continuing basis and can't comment upon every opportunity at every stage."
Mahindra could benefit from the Swedish company's engine design and technology as in the case of a similar arrangement it has with Peugeot on two wheelers, where it acquired a 51 per cent stake.
The company had also bought Korean auto maker Ssangyong.