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National Electric wheels in bankrupt Saab

by Lou Whiteman | Published June 13, 2012 at 10:52 AM

National Electric Vehicle Sweden AB on Wednesday, June 13, agreed to buy Saab Automobile AB and said it soon hopes to begin manufacturing electric cars based on the bankrupt Swedish carmaker's gas-powered models.

Saab's receivers, law firms DLA Nordic and Delphi, didn't release a sticker price for the sale to National Electric, which is 51%-owned by National Modern Energy Holdings Ltd. and 49%-held by Sun Investment LLC.

National Modern Energy is the investment vehicle of Sino-Swedish businessman Kai Johan Jiang and Sun Investments is a Japanese technology investor.

"The Chinese can increasingly afford cars. However, the global oil supply would not suffice if they all buy petroleum-fueled vehicles," Jiang said in a statement.

Saab has produced no cars for nearly a year after mounting debts left it unable to pay suppliers and employees. The company sought protection from creditors late last year after bumpy negotiations to sell it to a consortium of Chinese automotive companies failed repeatedly.

At least one of the companies, manufacturer Zhejiang Youngman Lotus Automobile Co. Ltd., remained in the latest auction only to be overtaken by National Electric Vehicle. China's Zhejiang Geely Holding Group Co. Ltd., which bought domestic Saab rival Volvo Cars AB from Ford Motor Co., had also been interested.

The sale covers not only Saab Automobile but also units Saab Automobile Tools AB and Saab Powertrain AB. The sale does not include the company's Saab Automobile Parts AB division as well as the rights to the Saab 9-5, which are owned by former parent General Motors Co.

Saab produced cars for about 50 years and was part of the Saab AB industrial conglomerate before the car activities were sold to General Motors in 1990.

Dutch high-end sports carmaker Spyker NV bought Saab from then-bankrupt General Motors Co. in 2010 before the Swedish company filed for bankruptcy in 2011. Spyker has since written off the investment and was the target of an unsuccessful approach by Greenwich, Conn. private equity and hedge fund North Street Capital LP, which last month made a $320 million unsolicited approach for camper icon Winnebago Industries Inc.

Saab Automobile has 13 billion Swedish kronor ($1.85 billion) in debt, according to the receivers. The liabilities include Skr2.2 billion owed to Sweden, Skr606 million to GM and Skr513 million to employees. It also owes an additional Skr2.2 billion to GM for a share purchase but the former parent is unlikely to collect.

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