Saab have made several announcements in regard to deals made with Chinese companies Pang Da and Youngman since mid-May. These deals have changed slightly in nature as each new announcement has been made and I thought it might be useful for those interested in Saab business to track the dynamic nature of the deals.
Please note that these are just dot-point summaries and not detailed examinations of the conditions associated with each deal. They are treated this way to quickly and easily present significant changes to the deals where these have occurred.
May 16 – Initial MoU with PangDa
- Memorandum of Understanding signed with Pang Da (non-binding)
- Includes a strategic alliance consisting of a 50/50 distribution joint venture (DJV)
- includes provision for a manufacturing joint venture (MJV) for Saab branded vehicles as well as for an MJV-owned brand (the so-called ‘child brand’) in China.
- Saab Automobile will have up to 50 percent in the MJV, with Pang Da and a to-be-selected manufacturing partner owning the remaining shares.
- Pang Da purchase 30million Euros worth of vehicles with an option to purchase 15mil Euro more within 30 days.
- Pang Da to take 24% stake in Spyker (subsequently renamed Swedish Automobile) valued at 65mil Euros
June 1 – Pang Da Advances additional order
- Pang Da exercise option to purchase 15mil Euros worth of additional vehicles as per the May 16 deal.
June 13 – Addition of Youngman to May 16 MoU
- Youngman to take 29.9% ownership interest in Swedish Automobile, valued at 136mil Euros
- Pang Da retain their right to a 24% ownership interest, however the cost of this 24% investment by Pang Da is raised from 65mil Euros to 109mil Euros because of additional equity to be contributed by Youngman.
- Distribution joint venture moves from 50/50 between Saab and Pang Da under the initial agreement to a tripartite DJV – Saab 33%, Youngman 33% and Pang Da 34%
- Manufacturing joint venture conditions change to see Saab Automobile and Youngman each have a 45% interest (Saab was to have a 50% interest under the initial agreement) and Pang Da hold the remaining 10%.
- MoU is subject to conditions before being confirmed as a binding agreement. Agreement will be subject to regulatory approvals in Sweden and China.
- Equity components of previous MoU now converted to binding agreements. These are still subject to regulatory approval, which all parties are working on and expect to receive in coming months.
- Parties continue working towards execution of binding agreements for a strategic alliance consisting of a tripartite distribution joint venture and a tripartite manufacturing joint venture for Saab-branded and child brand vehicles in China.
- Saab and Youngman make conditional agreement on a 50/50 new product joint venture (NPJV) that will see three new models developed – identified as Saab 9-1, Saab 9-6 and Saab 9-7. Saab will contribute design, development and testing expertise and Youngman will contribute finance.
- Agreement on NPJV is also dependent on regulatory approvals, which is expected in a timely manner.
I hope that helps to clear up the nature and current status of the deals, which have steadily increased Saab’s partnership with Pang Da and Youngman. As noted in the most recent release on July 4, this broad base and increased co-operation is expected to provide better conditions for the entry of Vladimir Antonov into the ownership group, which will only further increase Saab’s stability into the future.