Spyker Car NV announced today that Saab Automobile AB, Pang Da Automobile Trade Co. Ltd and Zhejiang Youngman Lotus Automobile Co. Ltd have signed a "Memorandum of Understanding" to cooperate. The letter of intent includes an equity investment of € 245 million, as well as a strategic alliance that consists of three pillars and includes the production of Saab vehicles and another brand to be established for China.
With Youngman's intended entry into Saab, Pang Da will pay 24 million instead of € 65 million for the participation and will provide two members of the Supervisory Board for the 109% target. Youngman will acquire 29,9%, paying 136 million for the shares. Youngman also has the right to send two members to the Supervisory Board. The “Memorandum of Understanding” is non-binding and requires the approval of the authorities.
If the letter of intent is implemented, we are at a historic point. Saab is then a Chinese company
The press release in original:
Trollhättan, Sweden: Spyker Cars NV (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 has an equity participation in the total aggregate amount of about EUR 245 million as well as a strategic alliance of a three partite 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 would buy an equity stake in Spyker for a total amount of $ 65 million, representing 24 percent of Spyker on a fully diluted basis. With Spyker, the equity stake in Pang in Spyker wants to stay at 24% 109 million. The share price remains at EUR 4.19 by share and Pang Da wants to have the right to nominate up to two members of the Supervisory Board of Spyker.
Youngman wants to take a 29.9% interest in Spyker on a fully diluted basis investing EUR 136 million at EUR 4.19 per share. Youngman wants to be a member of the Supervisory Board of Spyker.
Spyker, Saab Automobile, Pang Da and Youngman wants to set up joint ventures with Saab-branded and child-branded vehicles and the distribution of Saab-branded and child-branded vehicles for the China market. Saab Automobile and Youngman wants each and every 45% interest in the JV and Panda wants to hold the remaining 10%. Saab Automobile and Youngman wants each and every 33% interest in the distribution JV and Pang Da wants to 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 government 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. ”
Source: Saab Automobile AB