STOCKHOLM (AP) -- Crisis-hit car maker Saab on Tuesday announced it has struck a $40 million deal to sell and lease back property in an effort to pay off debts that have forced it to halt production and withhold workers' salaries.
If approved by Swedish and European regulators, the property deal could help Saab ease a severe cash shortage that has pushed the loss-making Swedish brand closer to bankruptcy. However, Saab's future remains in doubt as it needs a lot more funding to stay afloat long term.
Saab's owner Swedish Automobile said it signed a conditional deal to sell 50.1 percent of the shares in wholly-owned subsidiary Saab Automobile Property to a consortium led by Swedish real estate company Hemfosa.
The property unit owns the Saab factory in Trollhattan in southwestern Sweden, where production has been at a standstill for months because Saab hasn't been able to pay suppliers.
Under the deal, the buyers have the option to buy additional shares to boost the amount to 300 million kronor ($47 million), Swedish Automobile said.
The announcement comes a day after the troubled auto maker said it had received a euro13 million ($18.4 million) car order from a Chinese company. Swedish Automobile, a Dutch company previously known as Spyker Cars, claimed that deal would provide enough funds to help it pay salaries and part of its debt to suppliers.
Last week, Saab said it had run out of cash to pay its 3,700 workers, raising doubts over how long the brand could survive. Previous owner General Motors was winding down the brand when Spyker, a small luxury sports car maker, bought it last year.
The property deal hinges on approval from the Swedish National Debt Office, the government and the European Investment Bank.
The debt office has guaranteed Saab's loans from the European Investment Bank and must agree to release its collateral in the shares of Saab Property.
Debt office spokeswoman Unni Jerndal was unable to give a timeline for when it can announce a decision"This is highly prioritized for us. We can't specify more, but we are well aware of Saab's current situation," she said.
The Swedish government said it had tentatively approved the deal, on condition that no changes are made to the terms. It did not give more details.
Swedish Automobile said it aims to enter a 15-year lease agreement so that Saab can continue to use the property.
"Our next step will be to reach an agreement with our suppliers so that we can get our material and resume production," Saab spokeswoman Gunilla Gustavs said.