Spyker Cars and China's Pang Da Automobile Trade Co have formed a strategic partnership with Zhejiang Youngman Lotus Automobile Co in a 245-million-euro (US$352.1 million) deal to help rescue its struggling Swedish auto maker Saab.

According to a memorandum of understanding signed yesterday, Youngman will pay 136 million euros for a 29.9 percent stake in Netherlands-based Spyker, and Pang Da will own a 24 percent stake in Spyker with an investment of about 109 million euros, Spyker said.

The deal includes Youngman setting up a distribution joint venture and a manufacturing venture for Saab models in China.

Spyker, which is seeking investment for cash-strapped Saab, announced a surprise alliance with Pang Da in mid-May, five days after its partnership with China's Hawtai Motor collapsed amid fears of failing to obtain regulatory approval.

"Teaming-up with Youngman will make it easier for us to win government approval," said Pang Qinghua, chief executive officer of Hebei Province-based Pang Da. "Before Spyker and Hawtai's deal, Youngman and Saab had already signed a memorandum of understanding for cooperation."

According to China's acquisition regulations, car makers are less likely to receive approval for a deal if a proposal has been submitted by a Chinese rival as the government discourages domestic companies from competing with one another to buy the same overseas firm.

Pang also told Shanghai Daily via telephone that the company plans to reduce its stake in Spyker to 10 percent and it is looking for a third party, probably an investment fund, to take the remaining 14 percent.

According to the MOU, Youngman will hold 33 percent in the distribution joint venture in China, Pang Da will have 33 percent, and Saab 34 percent. They will also form a joint venture for manufacturing, in which Youngman will control 45 percent, Pang Da 10 percent, and Saab 45 percent.

Pang also said Saab models will be produced at Youngman's plant in Zhejiang Province in the future.

Independent analyst Jian Xinguang said there is little chance Pang Da will gain government approval as industrial regulations require a Chinese company to hold more than 50 percent in any new joint venture.

Production at Saab's plant in Sweden was suspended again last week due to a shortage of parts.

Pang Da raised 6 billion yuan in an initial public offering in April.

Spyker will change its name to Swedish Automobile NV tomorrow.