The strange saga of Saab has taken another hairpin turn this morning: in a short post to its website, Saab says that Chinese firms Pang Da and Youngman will now purchase 100% of the company. But the three parties still have a few hoops to jump through, including getting authority from Chinese regulators.
Earlier this week, you'll recall that Guy Lofalk -- the man in charge of Saab's restructuring -- formally asked Swedish courts to scrap the automaker's reorganization plans. At the time, Pang Da and Youngman seemed to be backing away from a deal that would've allowed them to purchase 54% of Saab for around $335 million. Lofalk argued that without that cash, and without any vehicles rolling off Saab's production line, the automaker had no way of remaining a viable business.
And so, Lofalk did what many would do: he pulled the plug. By asking the courts to nix Saab's reorganization plans, Lofalk was essentially asking Sweden to push Saab into bankruptcy. If that had happened, government officials would've seized Saab's assets and begun liquidating them to pay off Saab's outstanding debts -- including workers' wages.
As we mentioned, though, Pang Da and Youngman hadn't completely turned their backs on Saab. They met with company representatives on two occasions to propose a 100% buyout of the brand, but both times they were rejected -- largely due to passionate objections from the man who bought Saab from General Motors last year, Victor Muller.
In the end, Lofalk's more even-keeled view of the situation has won out. He knows that the only way to save Saab -- and its employees' jobs -- is to sell the company whole-hog to Pang Da and Youngman. The final price: 100 million Euros, or about $141 million U.S, which will be paid in installments.
There are a few catches in Saab's sale plan -- some easy to manage, some not so easy.
For starters, Saab has to remain in reorganization. That's simple to do: Lofalk has already withdrawn his request to the Swedish courts.
Then there are the requirements of the various stakeholders to meet -- most importantly, "the commitment of Pang Da and Youngman to provide long term funding to Saab Automobile". Now that the notion of a full sale has become fixed in everyone's mind, presumably the details of that transaction can be handled at the negotiating table without too much hullabaloo.
The biggest problem, however, will be securing approval from Chinese regulators. At the moment, China is awash with car companies, both domestic and foreign. Government officials understand that the country's auto market is booming now, but they also understand that it will begin to cool before long. To avoid troubles and bankruptcies down the line, they're keen on limiting the number of automakers doing business in China. (True, China is more capitalist than it's been in the past, but it's still a long way from "free market".)
As you might remember, Beijing quietly nixed the sale of HUMMER to Sichuan Tengzhong in 2009. Could the same fate befall Saab? It's hard to say, since Chinese officials are notoriously oblique, transparency being an entirely new concept.
On the upside (for Saab fans), Saabs are comparatively small and efficient when measured against HUMMER vehicles, which was a concern at the time that HUMMER's sale to Tengzhong was canned. (China is trying to make headway in the green economy, and many thought that HUMMER's reputation for building gas-guzzlers would run counter to that goal.)
On the downside, Saab is a struggling car brand that will require vast resources to get up and running again. China already approved the sale of one upscale Swedish marque just last year -- will it take on another? The deal is only valid until November 15, so the clock, she's a-ticking.
For another take on this story, check our sister site, Motor Authority.