BAIC gets 2.9bln USD credit from Bank of China – Saab purchase imminent?

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Early reports from Reuters are reporting that BAIC, Beijing Automotive Industry Corporation, has received a 2.9 Billion USD credit line from the Bank of China which could indicate that a solo bid on Saab is in the pipes after the deal in which Koenigsegg would take on Saab with BAIC help fell through:

Reuters reports:

BEIJING, Dec 4 (Reuters) – Beijing Automotive Industry Holding Corp (BAIC) has obtained a 20 billion yuan ($2.93 billion) line of credit from the Bank of China (601988.SS)(3988.HK), the bank said on Friday.

BAIC has said it might still be interested in buying General Motors’ [GM.UL] Saab unit, after a consortium led by tiny Swedish luxury car maker Koenigsegg, pulled out of talks last week. BAIC was a member of that consortium.[ID:nPEK20085]

BAIC declined to comment.

Major Chinese carmakers are hungry for money to upgrade their technologies, expand production scale and eventually tap into the global market, and it is reasonable for Chinese banks, controlled by the government, to provide them with liquidity.

The credit that BAIC, China’s fifth-biggest carmaker, gets is seen enough to boost the production scale of the Beijing-based automaker, which does not even have its own car brand.

Its four-year old Mercedes-Benz car venture with Daimler AG (DAIGn.DE) broke even last year and its tie-up with Hyundai Motor Co (005380.KS) has a long way to go before catching up with top players in the market such as Volkswagen AG (VOWG.DE).

“Twenty billion yuan is more than enough for production expansion,” said Li Chunbo, an analyst with CITIC Securities.