Press Release: Saab Automobile, Spyker, Pang Da And Youngman Enter Into MOU On Distribution/Manufacturing Partnership For China And Equity Participation

Trollhättan, Sweden: Spyker Cars N.V. (Spyker) announces today that Spyker, Saab Automobile AB (Saab Automobile), Pang Da Automobile Trade Co., Ltd (Pang Da) and Zhejiang Youngman Lotus Automobile Co., Ltd. (Youngman) signed a non-binding memorandum of understanding (MOU). The MOU includes an equity participation in the total aggregate amount of about EUR 245 million as well as a strategic alliance consisting of a three partite distribution joint venture and a tripartite manufacturing joint venture for Saab-branded and child brand vehicles in China.

On 16 May 2011 Spyker and Saab Automobile signed a memorandum of understanding (the 16 May MOU) with Pang Da, China’s largest publicly traded automobile distributor with over 1,100 dealerships nationwide. That 16 May MOU included a strategic alliance consisting of a 50/50 distribution joint venture (DJV) and a manufacturing joint venture (MJV) for Saab branded vehicles as well as for an MJV owned brand (the so-called ‘child brand’) in China. It was agreed that Saab Automobile would have up to 50 percent in the MJV, with Pang Da and a to-be-selected manufacturing partner owning the remaining shares. Pang Da and Saab Automobile have now agreed with Youngman to become the manufacturing partner in the MJV (in which Youngman will take 45% of the shares, Saab 45% and Pang Da 10%) and the DJV in which Youngman will take 33% of the shares, Pang Da 34% and Saab Automobile 33%.

Under the May 16 MOU, Pang Da would take an equity stake in Spyker for a total amount of EUR 65 million, representing 24 percent of Spyker on a fully diluted basis. With Youngman entering as a new shareholder in Spyker, the equity stake of Pang Da in Spyker will remain at 24 % raising its investment to EUR 109 million. The share price remains at EUR 4.19 per share and Pang Da will have the right to nominate up to two members of the Supervisory Board of Spyker.

Youngman will take a 29.9 % interest in Spyker on a fully diluted basis investing EUR 136 million at EUR 4.19 per share. Youngman will have the right to nominate up to two members of the Supervisory Board of Spyker.

Spyker, Saab Automobile, Pang Da and Youngman will set up joint ventures with respect to the manufacturing of Saab branded and child branded vehicles and the distribution of Saab branded and child branded vehicles for the China market. Saab Automobile and Youngman will each have a 45% interest in the manufacturing JV and Pang Da will hold the remaining 10%. Saab Automobile and Youngman will each have a 33% interest in the distribution JV and Pang Da will hold 34%.

The MOU is non-binding and the transactions following the MOU are subject to agreement on definitive transaction documents and certain conditions, which include consents from certain governmental agencies and third parties.

Victor Muller, CEO of Spyker and Saab Automobile said: “Having entered the MOU on May 16 with Pang Da, we collectively immediately set out to identify the most suitable (manufacturing) partner to join Saab and our joint ventures. We are convinced that Youngman represents all the qualities required to make Saab and the joint ventures a success. This MOU not only shows the belief of Pang Da and Youngman in our products for the Chinese market, it also is a step that significantly strengthens Saab’s financial position and would secure the mid and long term financing of Saab Automobile. Both Pang Da and Youngman have demonstrated a similar entrepreneurial mindset as we have which we feel will be instrumental to establish Saab’s presence in China. I am very confident that based on their experience, proven skills, their ability to move quickly and their financial strength, we found the partners that are best suited to fully explore Saab’s potential in China.”

Mr. PANG Qinghua, CEO of Pang Da, said: “Since our visit to Saab Automobile in Sweden we are even more convinced of the potential of Saab in the global market and the Chinese market, the number one market in the world, in particular and we intend to fully explore it. Not only are we impressed with the current and future product line up that is very well suited to the needs of the Chinese market but we are particularly impressed by their design, engineering and manufacturing skills.”

Mr PANG Qingnian, CEO of Youngman said: “We have been in contact with Saab Automobile for quite some time and we are very pleased to have reached an agreement with both Pang Da and Saab. We feel that Saab as a premium European brand appeals strongly to the taste and preferences of the Chinese customer who is looking for top quality vehicles with the highest levels of safety, driving pleasure and comfort and an unmistakable design language. Youngman is an automobile industrial group that produces and sells Youngman branded motor cars, MAN brand heavy type trucks and automobile spare parts. Our Manufacturing facilities are state of the art and are exactly tailored to build Saab vehicles at the highest quality standards. We look forward to a long lasting and successful relationship with Saab Automobile and Pang Da both in China as well globally through our investment in Saab.”

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  1. Why not arrange for all consent first, or at least a substantial part, and present a binding MOU afterwards? I mean: this is, in a way, good news. But on the other hand, there’s so many escapes, that it actually says nothing.
    Nevertheless I am most certainly recognizing the effort that has been put into this agreement, but I was hoping for some solid ground for the blue and white collars, and all others involved in designing, building and selling Saabs.

  2. While this is certainly good news, Saab needs an immediate infusion of cash to start production again.  Saab won’t see money from this deal for a number of months.  Perhaps the possible sale of the Saab plant and associated properties will go through soon to get the company up and runnning again.

    1. The sale and lease back looks like it’s moving ahead quickly now that someone other than VA is involved. Sounds like some roadblocks have been removed and this would be the first step in securing some real money.

      1. Yes, Jason.  Sounds like the first bit of good news in a long time.  I’m excited about the prospect.

  3. Sounds great…. hopefully will get approved. Geely has done a good job with Volvo thus far.

    If I’m not mistaken, Youngman Lotus is somehow related to the Proton Lotus F1 team. I am referring to the green and yellow Lotus team, not the black and gold Lotus/Renault team. Renault and Proton Lotus seem to be in endless litigation regarding who owns the correct trademark version of Lotus to race as Lotus F1.

    Perhaps Youngman will just give up and switch its green and yellow Lotus Proton F1 team to Saab F1 now that they have controlling interest in Saab.

    Or did I just get this massively incorrect? lol

  4. Swade,

    I feel like Saab owners, enthusiasts and future customers around the world are all past due for an in-depth conversation with Mr. Muller.  The ups and down over the past couple of months, especially coming on the heels of a stand-out year of product premiers and announcements, have left me exhausted and confused – and I do my best to keep up to date on all things Saab; imagine what the average car buyer is thinking!

    The automotive press and the news media at large have hardly given Saab an easy time of it lately; it’s almost as if some writers are out for blood, desperate to see Saab go under (I’m looking at you, “Truth About Cars”).  Why doesn’t Mr. Muller put the fearmongering and rumors to rest, while giving us Saab owners some clear, honest information about what the company is doing and where they’re heading?  Not just another press release or conference, but a meaningful dialogue, presented with the same commitment and intelligence he has become known for. 

    The world seems to be clamoring for insight into Saab’s future.  I suggest Mr. Muller takes the lead on providing that insight, and shares with all of us his specific actions, goals and vision for making Saab what we all want it to be – a viable, independent company designing and building some of the most innovative cars available.  If confidence is the keyword in all of this, I can think of no better confidence-building measure than to take the stage and own the conversation in Saab’s favor.  It would be a terrific opportunity.

    1. I respectfully disagree – it’s a mistake for Saab to talk about the future without having everything locked down first.  They’ve already been burned by the Hawtai reversal – I would not advise Saab to say anything more than is legally required as a publicly traded company until the actual contracts are signed.  

      Saab has an expectations management problem – and unfortunately Victor’s irrepressible optimism works against him in that context.  

      1. That’s a fair argument, Greg.  I wish it were otherwise, but it makes sense.  Hopefully it all works out in Saab’s favor.

    2. Alyeska,

      VM’s currently in China and has been chasing ongoing solutions to the issues facing Saab for some time.  A good Q&A is right at the top of my to-do list, but the current work has to come first.  Don’t worry, it’s on the agenda.

  5. Swade,

    What exactly is a “child brand”?  Does this mean that a second brand may be developed for the Chinese market?


    Ed K.

    1. Edward ,

      They manufacture MAN trucks and coaches and name them Youngman .It might be just
      renaming Saab for the Chinese market .



  6. Getting a bit nervous now when there is no update .How long will it take for this Deal to be approved by the relevant authorities ?