Saab signs manufacturingdeal with Chinese firms

STOCKHOLM, June 13 (Dow Jones): Saab Automobile Monday signed a new deal with two Chinese companies that, if cleared by regulators and existing investors, effectively would put control of the Swedish company in the hands of the Chinese. Such a move would mean, with Volvo Car Corp. already under Chinese ownership, that the entire Swedish car sector would be controlled from China. However, with cash-strapped Saab still struggling to pay suppliers, and regulatory clearance up to three months off, it is still uncertain whether the deal can be pushed through quickly enough to avoid more disruption. Saab's Dutch owner, Spyker Cars NV (SPYKR.AE), said that Pang Da Automobile Trade Co. Ltd. (601258.SH) and Zhejiang Youngman Lotus Automobile Co. Ltd. had signed a non-binding memorandum of understanding with Saab. "This shows not only 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," said Chief Executive Victor Muller in a statement. Youngman will take a 29.9per cent interest in Spyker on a fully diluted basis, investing EUR136 million at EUR4.19 per share. Youngman will also have the right to nominate up to two members of the Spyker supervisory board.