December 5, 2011 / 9:50 AM / 7 years ago

Chinese bank in Saab rescue talks

AMSTERDAM (Reuters) - A Chinese bank is in talks about taking a stake in Saab, in the latest attempt to rescue the crisis-hit Swedish car maker after an earlier deal to secure its future ran into trouble.

Saab owner Swedish Automobile SWAN.AS on Monday declined to name the bank it is talking to about a potential investment in Saab, which halted operations in April.

Chinese investors Pang Da Automobile Trade Co. (601258.SS) and Zhejiang Youngman Lotus Automobile, had agreed to invest in the car manufacturer, but the deal has encountered numerous problems.

Swedish Automobile said on Monday it was still in discussions with Youngman, but declined to say whether Pang Da was still involved.

Saab has been under court protection from creditors in Sweden since September after unions representing Saab employees began proceedings to put it into bankruptcy over unpaid wages.

Swedish Automobile said on Monday the discussions included a short-term solution to enable Saab Automobile to pay the November wages and continue its reorganization.

Shares in Swedish Automobile opened up 26 percent and were 30 percent higher by 0930 GMT.

Saab has lurched from crisis to crisis in the past year and has not produced any cars for several months as its main factory in Trollhattan, Sweden, has been shut because of unpaid salaries and bills.

On Sunday, Reuters reported that a Chinese bank would replace Pang Da in a rescue deal, which would help pave the way for an approval by General Motors (GM.N), which still has preferential shares in Saab and has supplied the Swedish auto brand with crucial components.

General Motors, which operates in China in a partnership with state-run SAIC Motor Corp Ltd (600104.SS), said in early November that continuing to supply components and technology to Saab’s new owners would run counter to the interest of its own shareholders.

General Motors said last month it would stop supplying components and technology if Youngman and Pang Da succeeded with their acquisition bid.

Pang Da operates auto dealerships in China while Youngman produces commercial vehicles, including buses and trucks, and sells cars under the Lotus brand.

Swedish Automobile said on Monday the outcome of the discussions with Youngman and the Chinese bank was still uncertain and subject to stakeholder approval.

Reporting By Roberta B. Cowan; Editing by Will Waterman and Erica Billingham

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