Saab saved by second deal with Chinese firm

China's largest listed car distributor has come to the rescue of Saab in a deal worth up to €110 million (£96m), staving off the collapse of one of Sweden's best-known brands.

Spyker Cars, the Dutch owner of Saab, yesterday announced a deal with China's Pangda Automobile which it said would secure Saab's medium-term funding needs and allow production to resume within days.

Saab will immediately receive €30m from Pangda for vehicles destined for sale in China, allowing it to repay suppliers and restart production soon, chief executive Victor Muller said.

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The firm's Trollhatten plant has been idle for about six weeks. Parts suppliers ceased deliveries until bills were paid.

"This is a good first step if it can lead to Saab talking to its suppliers about paying its bills," said Svenake Berglie, chief executive of the suppliers organisation, FKG.

He said it would take about a week to get negotiations done with suppliers and another week to restart output.

Suppliers estimate Saab owes them "hundreds of millions" of crowns to suppliers for car parts, electricity and plant maintenance.

Saab has "a strong product line now but what they need is long-term financial stability," he added.

The deal is the second pact with a Chinese rescuer in as many weeks after a deal with Hawtai Motor Group fell through last week.

It could face some of the same problems as Chinese firms need government approval for acquisitions or overseas investments.

Muller said the fact Pangda is a distributor, not a manufacturer, meant it would not need approvals to buy Saab cars for sale in China.