Tag Archives: Spyker Automotive

Saab Sues GM For Blocking Chinese Investors

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Luxury sports car maker, Spyker, has filed a lawsuit against General Motors accusing them of deliberately bankrupting Saab by blocking deals with foreign investors. When Spyker bought Saab from GM in 2010, the agreement allowed GM to retain the rights to technology and patents used in the engineering of Saab vehicles. As Saab struggled to avoid a court action to liquidate the company, Chinese automakers, Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade came forward with $140 million dollars to invest in the company with an expected additional investment of up to $708 million to build Saab vehicles in Sweden’s Trollhattan plant as well as open a factory in China. According to Spyker, the deal was blocked by GM executives because they did not want Chinese investors to have access to GM technology, allowing them to compete against the U.S. auto maker in China, one of its most important foreign markets. Spyker Chief Executive Victor Muller accused GM of “deliberately pushing Saab over the cliff”. Spyker is seeking $3 billion in damages, the estimated future value of Saab if Zhejiang Youngman had been allowed to buy the Swedish auto maker and invest in it.

The lawsuit comes as GM struggles to survive in Europe. The auto maker said last week that its second-quarter earnings plunged 38% due to a $361 million loss in the company’s European operations.

Saab Saved From Liquidation By Chinese Automakers

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Hours before facing court action to liquidate, Saab has been saved by Chinese automakers, Zhejiang Youngman Lotus Automobile and Pang Da Automobile Trade, in an agreement to buy the company for a little over $140 million. The Swedish automaker has been struggling to survive since January 2010 when General Motors sold the automobile division to Spyker cars. In April 2011, the company continued to struggle as factories closed due to lack of credit. At the time, the tentative agreement with China’s Pang Da Automobile Trade allowed the factories to reopen, giving the Chinese company an equity stake in Spyker.

The Chinese companies are expected to invest up to $708 million in Saab, and plan to build vehicles at their Trollhattan plant as well as in China, which will become the second home market for Saab. The deal first requires the approval of the authorities in Beijing, the European Investment Bank, the Swedish government, as well as G.M., which has links to Saab, through intellectual property and preferred shares.

Saab Automotive Future Questionable

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The future of Saab is once again being questioned after negotiations between Spyker Cars and China’s Hawtai Motor Group were terminated. Saab hoped that money obtained through the million dollar agreement, would allow Saab to reopen their Sweden factories, which have been closed since April due to lack of credit from suppliers. Hawtai confirmed that talks have fallen through saying that both sides were unable to reach an agreement in the allowed time frame, but hope that negotiations will continue. The lack of consensus of the deal is being blamed on a hasty agreement put together by Spyker’s chief executive and chairman before full approval was obtained from its backers.

Spyker also continues to remain in discussion with another potential investor, the Russian businessman Vladimir A. Antonov. Negotiations between the two parties was blocked last year by G.M before they sold the Swedish automaker. Allegations of suspicious financial dealings was the reason for the breakdown of those negotiations.

Update

Things are starting to look better for Saab today as they signed a tentative deal with one of the largest publicly traded car distributors in China. The finance and import deal with Pangda Automobile Trade, comes after several negotiation collapsed with other potential Chinese partners. Under the agreement, Saab will receive $63 million for an unspecified number cars, plus almost $90 million for equity in Spyker Automotive, giving them some control in Spyker and Sabb management. The deal will include a joint venture to make and distribute cars in China under the Saab brand and a new brand not yet announced. According to Victor Muller, chief executive of Spyker and Saab, “The agreement is a tremendous boost for the company, allowing them to sell imported Saabs in China.”