AMSTERDAM/BEIJING A rescue deal for Saab involving China's Hawtai Motor Group collapsed on Thursday, leaving owner Spyker SPYKR.AS chasing new funding alternatives as it attempts to restart production at the Swedish carmaker.
Hawtai and Dutch-listed Spyker agreed a deal last week to pump 150 million euros ($216 million) into the loss-making brand and produce a new model in China. But this was spoiled by a failure to get necessary approvals.
Spyker said it was continuing talks with Hawtai, while another Chinese company, sports utility vehicle maker Great Wall Motor (2333.HK), was also talking to the Dutch company about a possible tie-up, a source told Reuters.
Other possible investors include Vladimir Antonov, who is still interested in the troubled brand, a spokesman for the Russian businessman and former Spyker shareholder said.
Tiny supercar maker Spyker has struggled to turn Saab around in the year since it bailed out the former General Motors (GM.N) unit. GM retains an interest in Saab through preference shares.
"Since it became clear that Hawtai was not able to obtain all the necessary consents, the parties were forced to terminate the agreement with Saab Automobile and Spyker with immediate effect," Spyker said, adding it is also "negotiating equity and debt financing and/or technology licensing with various (strategic) Chinese partners."
Loss-making Saab has run out of cash to pay its bills and several suppliers have stopped delivering parts, halting production at Saab's Trollhatten plant for most of last month.
All of Saab's employees, including those who are not working due to the production shutdown, are being paid, a spokesman said. Saab had 3,355 staff at the end of 2009.
The chairman of Sweden's association of car industry suppliers Christer Palm expressed concern about the stoppages.
"Talks with suppliers haven't come very far. This is going to take time. Saab needs to find a new shareholder, an approved financier and I hope (Spyker Chief Executive) Victor Muller has one last trick up his sleeve."
When contacted, Muller declined to comment beyond saying: "I'm always optimistic, and this is no exception."
MORE CHINA TALKS
Hawtai is not the first Chinese company to struggle to complete a foreign takeover. Sichuan Tengzhong Heavy Industrial Machinery's bid for GM's Hummer collapsed in 2010 and China's Xinmao did not have enough time to get approvals to continue its bid for Dutch cable maker Draka.
Spyker said Saab Automobile may still enter into a strategic partnership with Hawtai or another Chinese party on manufacturing, technology and distribution in China.
Great Wall declined to comment on any talks.
Chinese companies are subject to strict policies on foreign acquisitions and many have fallen foul of Beijing's bureaucracy, although it has moved to streamline approvals.
Theodoor Gilissen analyst Tom Muller said that Spyker's reported cash of 70 million euros as of the end of December would have been spent in the first three months of 2011.
"It's living by the day, it's not just having money to pay its future obligations, it's what it owes its suppliers already," Muller said.
Dutch shareholder group VEB said there was still hope.
"...Victor Muller is in China now talking, so maybe another Chinese party will step up," said Patrick Beijersbergen, head of economic affairs at VEB.
However, Spyker shares fell to a two-week low, and were down 10.7 percent at 3.75 euros by 1042 GMT, versus a 0.7 percent fall on the Amsterdam small cap index .ASCX.
Earlier this month Spyker said it had secured a 30-million euro convertible loan agreement with shareholder Gemini Investment Fund Ltd and that it would also like to draw 29.1 million euros on a loan from the European Investment Bank (EIB).
Meanwhile Antonov has also proposed buying a 29.9 percent stake in Spyker for up to 30 million euros, and agreed to buy Saab's real estate and plant and lease it back to release cash.
But those deals have been held up by the EIB, which declined to comment. Spyker said talks were continuing about borrowing from the EIB and getting consent for the sale of Saab property.
(Additional reporting by Gilbert Kreijger and Greg Roumeliotis in Amsterdam; Simon Johnson, Mia Shanley and Johan Ahlander in Stockholm and Don Durfee and Fang Yan in Beijing; Writing by Alexander Smith; Editing by Sophie Walker)