AMSTERDAM A 245 million euro rescue of car maker Saab SWAN.AS by its Chinese partners Youngman and Pangda (601258.SS) could still be sealed this year if Chinese authorities give the green light to the investment, a lawyer for Pangda said on Thursday.
Production at Saab has been more or less at a standstill since April when the company ran out of money to pay its suppliers and it has pinned its hopes on Chinese authorities approving the investment by Zhejiang Youngman Lotus Automobile Co and Pangda.
Saab, owned by Dutch-listed Swedish Automobile, expects China to approve the deal in November and has launched a cost-cutting plan to help keep it afloat in the meantime after a court gave it temporary protection from creditors this week.
Despite Saab's problems, Pangda's Dutch-based lawyer Peter Goes at law firm Linklaters said the Chinese car distributor's enthusiasm for the deal has not waned.
"They are most impatient on getting production restarted. The main interest of our client is getting the cars into China," Goes told Reuters.
If Chinese authorities approve the deal, Goes said the investment in Saab can be made reasonably quickly once a few "technical details" are completed, such as changing Saab's articles of association and possibly issuing a prospectus.
"If you want to issue shares (to Youngman and Pangda) you will need to have an EGM. But we see this as a formality. The deal can be closed before the end of the year," Goes said.
"In view of all the developments in relation to Saab and the possible bankruptcy of Saab there have been ongoing discussions in terms of structuring (the deal) and how to save this investment."
Pangda has already paid 45 million euros to Saab for 2,000 cars and has not yet received any vehicle due to the production stop, but Goes stressed the firm will likely place more orders in 2012 once production has been resumed.
Both Youngman and Pangda will be 50-50 partners in the 245 million euro investment, but the number of Saab shares to be issued to them has not been decided. This will depend on Saab's share price at the time the deal is closed, Goes said.
Although Saab is confident Chinese authorities will approve the deal, gaining such clearance can be a difficult hurdle.
Failure to secure approval scuttled Sichuan Tengzhong Heavy Industrial Machinery's bid for GM's (GM.N) Hummer in 2010.
China's National Development and Reform Commission still has to approve Pangda and Youngman's purchases, but Goes was unable to comment on the Chinese regulatory process as he was not personally involved in those discussions.
(Reporting By Aaron Gray-Block; Editing by Helen Massy-Beresford)