China's Zhejiang Youngman to bid for Saab again
20 January 2012
Chinese car manufacturer Zhejiang Youngman Lotus Automobile Co is planning to make a fresh bid to buy bankrupt Swedish Saab Automobile next week, Sweden's Daily Industry yesterday reported.
Youngman's top executives will go to Gothenburg next week to meet the bankruptcy administrators with a Swedish krona 5-billion ($730 million) offer, said the report.
Saab filed for bankruptcy in December last year after hopes of a life-saving funding from Chinese investors, including Youngman, collapsed due to opposition from Detroit-based carmaker General Motors (GM), which holds a veto on any sale since it continues to own key patents used by Saab.
The district court in Vanersborg, Sweden has appointed two receivers to either sell the company outright or break it up and sell it piecemeal. The proceeds would be used to repay Saab's creditors, which include GM.
Saab has been attempting to sell itself ever since late 2009.
Bloomberg had late last month reported that Mahindra & Mahindra (M&M), India's biggest sport-utility vehicle manufacturer, was interested in buying at least a part of Saab and was in the process of setting up meetings with the court-appointed administrators. M&M has so far not reacted to the news report (See: Mahindra eyes bankrupt Swedish carmaker Saab: report).
But Youngman appears to be confident of clinching the deal this time around and a source told the Daily Industry, "Once an agreement has been signed with the bankruptcy administrator, the production of Saab 9-3 in Trollhaettan factory in southwestern Sweden will start again within 15 weeks."
It also said that a Swedish delegation comprising government officials and representatives of Saab were in China on Wednesday to meet Youngman, which is keen to acquire Saab and invest in the development of new models on Saab's platform Phoenix.
Automotive News Europe also confirmed the news that Youngman may make a bid next week, but said that the deal looks to be highly optimistic as it is still unclear how Youngman intends to get around GM's objections,
Youngman's attorney has said that his client would develop its own technology to replace GM's.
GM, which still holds preferential shares in Saab, had rejected an earlier rescue plan and said that it would stop supplying components and technology Youngman were to acquire Saab.
The deal also requires approval from the Chinese authorities and the European Investment Bank, which has lent money to Saab, which could become the second Swedish carmaker to be acquired by a Chinese company after Ford Motors owned Volvo was acquired in 2010 by Geely Holding Group, for $1.3 billion in cash.
Youngman, based in Jinhua in the Zhejiang province, produces coaches and trucks in collaboration with the Germany's MAN. It also sells passenger cars in China, some models of which are engineered with the help of the UK-based Lotus Engineering.