Saab may be safe ... again

Since General Motors pulled the pin on it last year, it's recent history reads like a soapie that's full of financial lows and potential highs mixed in with a globetrotting search for a new shareholder.

It was to be spun off from its single biggest shareholder Spyker, then failure to secure funds saw its suppliers shut the doors, abruptly ceasing production.

Then there was an agreement with China's Hawtai Motors but that was scrapped after no-one could agree to the terms, then a rumoured deal with Great Wall Motors - denied by the Chinese - and now another China relationship.

Saab overnight issued a press release saying it has signed a memorandum of understanding with car distribution company Pang Da Automobile Trade.

Pang Da is the biggest public - it listed three weeks ago - vehicle distribution chain in China with 1100 dealerships. Saab says the memorandum commits the Chinese company to this month buy about $41 million worth of Saab cars and then another $20 million worth next month.

Pang Da will also pay $90 million for a 24 per cent stake in Saab's parent, Spyker.

For Saab, the deal represents a 50 per cent ownership in a distribution joint venture to sell Saab products. A separate 50 per cent stake in a manufacturing joint venture has also been agreed upon, though the manufacturing partner has yet to be named.

The manufacture would be of Saab cars and Chinese-badged Saab "clones". Spyker and Saab CEO Victor Muller says the partnership would "create a strong business, initially in the distribution and subsequently in the manufacturing of Saab vehicles in China".

"Pang Da is a forward-looking, profitable and well-capitalised public company that, as the single largest automobile distributor in China, sees enormous potential for our brand in their home market," he says.

The CEO of Pang Da, Mr Pang Qinghua, says the deal will "further enhance the competitive position of the Saab brand in China".

"With the new products Saab has launched since it became an independent car manufacturer early last year, such as the all new Saab 9-5 and the Saab 9-4X which have been widely acclaimed, and not in the least the upcoming successor to the current Saab 9-3, we believe the timing is perfect for Saab to enter the Chinese market,' he says in a statement.

"Our size, financial strength and competence in addition to our ability to move fast will be crucial to Saab's success in China." But it's not cut and dried yet. Saab says that some of the transactions are subject to "consents from certain Chinese governmental agencies, the European Investment Bank, GM and the Swedish National Debt Office."