China's Hawtai buys stake in Saab

Chinese auto manufacturer Hawtai Motor Group has acquired an initial 30% stake in Saab owner Spyker Cars after a £135 million deal.

Under the terms of the new agreement, the privately owned Chinese motor company will partner with Spyker on several manufacturing, technology and distribution ventures.

Through the deal, Swedish car manufacturer Saab hopes to raise enough funds to keep it afloat in the long-term.

Its production had been at a standstill since April 6 due to a lack of working capital, but after securing short-term loans of £53 million, it now aims to resume manufacturing 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 carmakers, both previously owned by US companies, are now in Chinese hands. Last year Ford sold Volvo to China's Geely for almost £1 billion.

Copyright © Press Association 2011