A small, privately owned Chinese carmaker has saved Sweden's Saab Automobile from imminent collapse through an agreement to provide £135 million in funds for the ailing brand.
Saab's owner Spyker Cars said Hawtai Motor Group will take an initial 30% stake in Spyker in the deal which also includes joint ventures on manufacturing, technology and distribution.
The agreement is the latest in a line of efforts by Saab to raise capital, but the first that would provide enough funds to keep the carmaker afloat long-term.
Saab's production has been at a standstill since April 6 due to a lack of working capital, but yesterday it said it had secured short-term loans of £53 million and aimed to restart production within a week.
Shares in Spyker, which bought Saab out of liquidation from General Motors in January 2010, rose 16% on the news.
The deal is subject to approval from Chinese government agencies, the European Investment Bank and the Swedish National Debt Office, Spyker said.
As a part of the deal with Hawtai, the Chinese company will invest £107 million for a 29.9% equity stake in Spyker and £27 million in a convertible loan with six months maturity.
The agreement means Sweden's two big car makers, both previously owned by US companies, are now in Chinese hands. Last year Ford sold Volvo to China's Geely for almost £1 billion.
Spyker CEO Victor Muller said the deal means Saab has secured "the required midterm financing" and allows the company to "enter the Chinese car market and establish a technology partnership with a strong Chinese manufacturer."
Meanwhile, Richard Zhang, vice president of Hawtai, said the deal with the "iconic" Saab brand will give his company access to innovative technologies and an international network which "would have taken us decades to build."