China's Beijing Automotive Industry Holding Corp. will take a minority stake in Koenigsegg Group AB to help the Swedish firm finance its bid to buy Saab from General Motors Co.
The deal also is the latest push by a Chinese automaker to secure a global footprint. It was announced just hours after another Chinese carmaker, Geely Automotive, said its parent wanted to buy Saab's Swedish rival Volvo, which has been put up for sale by U.S. parent Ford Motor Co.
Commenting on Beijing Automotive's planned stake in Koenigsegg Group. Saab spokesman Eric Geers said. "This naturally also offers fantastic opportunities for Saab in the Chinese market. It is clear that this will help Saab hugely."
He added: "We are now completely convinced that we will be able to complete the deal by the end of October."
Koenigsegg CEO Christian von Koenigsegg said: "This is an important step on the road toward a new Saab. We have a well prepared business plan, an important partnership and we are ready to proceed without state financing."
He declined to comment on how much capital would come from Beijing Automotive under the agreement, but said Koenigsegg's plans for Saab required "in the region of" of 11 billion Swedish crowns ($1.56 billion).
Koenigsegg and its new Chinese partner plan to work together on expanding Saab's and Beijing Automotive's products in China and other international markets, according to a release.
Beijing Automotive, China's fifth-largest automaker, dropped out of bidding for Saab sister brand Opel in July. Beijing Automotive sold 12,063 cars under its own brand in 2008, 18.7 percent more than in 2007, according to the Automotive News 2009 Guide to China's Auto Market. The automaker has joint ventures in China with Hyundai Motor Co. and Daimler AG's Mercedes-Benz.
Koenigsegg, backed by U.S. and Norwegian investors, struck a deal earlier this year with GM to buy the Detroit automaker's money-losing Saab business, but questions remained regarding the financing of the deal.
Better deal for Sweden
Koenigsegg presented the Swedish government with a new plan for financing its purchase of Saab on Monday.
State Secretary Joran Hagglund told Reuters the plan no longer involved any extra loan from the Swedish state on top of guarantees for funding from the European Investment Bank (EIB).
Hagglund said the Swedish government was still negotiating with Koenigsegg on a possible guarantee for a loan to Saab from the EIB, funds which are seen as vital for the Koenigsegg deal to go through as well as for Saab's survival.
Koenigsegg Chairman Augie Fabela was quoted as saying that the group also needed an additional 3 billion Swedish crowns ($420 million) of financing in addition to the EIB loan.
Koenigsegg told Reuters on Aug. 18 that the firm expected to close the deal within about a month. GM said it saw the deal closing by the end of the year.
Koenigsegg Group includes Swedish supercar maker Koenigsegg Automotive AB.
Reuters contributed to this report.