Bank of China to buy Pang Da's stake to rescue Saab: report
05 December 2011
Swedish Automobile, the owner of Saab, may once again be rescued after Bank of China agreed to buy Pang Da Automobile Trade Co's stake in the Stockholm-based ailing carmaker, Reuters yesterday reported, citing a source familiar with the deal.
Bank of China, the fourth-largest bank by market value in China will own just under 50 per cent of the company, which may pave the way for Saab's former owner General Motors (GM) to agree to the takeover deal, which is currently blocking the sale of the company.
GM, which still has preferential shares in Saab, had rejected an earlier rescue plan and last month said that it would stop supplying components and technology if Zhejiang Youngman Lotus Automobile Co and Pang Da weere to acquire Saab.
Last month, Saab's owner, Swedish Automobile NV, saved the cash-strapped carmaker from bankruptcy by striking a deal to sell Saab to two Chinese companies - Zhejiang Youngman and Pang Da - for €100 million ($142 million). (See: Swedish Automobile to sell Saab to two Chinese companies for €100 mn)
Both the Chinese companies pledged to invest $844 million, prompting a court to extend Saab's bankruptcy protection.
However, the sale requires GM' approval, as the US car maker not only holds preference shares, but is also a creditor by virtue of being a parts supplier to Saab.
The news agency said that the new plan has been presented to GM for its apprval.