May 2, 2011 – By Mia Shanley and Patrick Lannin
STOCKHOLM (Reuters) - Ailing car maker Saab has lined up almost 60 million euros ($88.9 million) in funds to restart production after a month of stoppages and has reached a deal with a Chinese partner, Dutch owner Spyker <SPYKR.AS> said on Monday.
Spyker's chief executive, Victor Muller, told Reuters he would announce details of a strategic partnership with China's Hawtai Motor Group on Tuesday, and that the deal involved "investing in Spyker." Muller, who is currently in Beijing, declined to give more details.
Hawtai Motor Group Co Ltd's main business includes the development, sales and export of motor vehicles, diesel engines for clean-type sedans and gearboxes for automatic transmissions, according to a January 7 filing from China Minsheng Banking Corp. It could not be reached for comment.
A source with knowledge of the matter last week told Reuters Saab was in talks with Great Wall Motor Co Ltd <2333.HK>, China Youngman Automobile Group and Jiangsu Yueda Group over a potential investment, though the source had said the talks should produce agreement over the weekend.
Spyker has already lined up Russian businessman Vladimir Antonov to put in money, too.
But a shortfall in 2010 sales meant Saab hit a cash crunch, running up bills to suppliers, who eventually stopped shipments and caused the production halt in early April.
Saab's sales target was 80,000 vehicles for this year and 120,000 for the following year, but last week the Swedish company said it would fail to meet those goals.
"Saab Automobile aims to restart production within a week, pending agreements on delivery schedules with its suppliers," Spyker said in a statement.
Spyker said that it has secured a 30-million-euro ($44.4 million) convertible loan agreement with Gemini Investment Fund Ltd -- one of Spyker's shareholders, which Muller said is owned by a Lithuanian businessman -- and that it would also draw 29.1 million euros on its loan from the European Investment Bank.
"We will do everything in our power to restore the confidence in our company as soon as practically possible," Muller added.
The deal with Gemini, which according to Reuters data has 10.8 percent of Spyker, has a 6-month maturity.
The interest rate of the loan is 7 percent a year and the conversion price is 4.88 euros per share. Spyker shares were up 0.55 percent at 4.24 euros in late Amsterdam trading.
Spyker said it continues to work on longer-term funding -- of which a purchase by Antonov of 29.9 percent in Spyker for up to 30 million euros is expected to be a part.
Antonov has also agreed to a buy Saab's real estate and plant and lease it back to release cash, though that has been held up after the EIB imposed terms with which Saab did not agree.
The EIB has also still to decide whether Antonov can become a shareholder of Spyker-Saab.
Antonov used to be a shareholder, but was forced to drop out of the takeover of Saab after reports of links to money laundering and organized crime, which he has denied.
He has said he has cleared his name and Sweden's Debt Office, which has guaranteed the EIB loan, has approved Antonov's return.
(Additional reporting by Sara Webb in Amsterdam and Simon Johnson and Niklas Pollard in Stockholm, editing by Gerald E. McCormick)
($1=6.039 Swedish Crown)