SHANGHAI (Reuters) -- China's Minister of Industry and Information Technology said he supported "in principle" the planned purchase of Saab by Chinese firms Pang Da and Youngman, the first official indication on how Beijing might react to the rescue plan announced on Friday.
Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co. signed an initial deal last week to pay 100 million euros ($142 million) to take over troubled Swedish carmaker Saab, owned by Swedish Automobile.
Chinese government approval is considered crucial to the deal going forward.
Asked earlier today whether the ministry would back the deal, ministry head Miao Wei said: "We support it in principle."
The Chinese government is one of a group of companies and institutions that must give their blessing to the deal. Saab's former owner, General Motors Co., still has preference shares in the automaker and is a major supplier of components so it also must approve the takeover.
A green light is also needed from the European Investment Bank and the Swedish government, all creditors to Saab.
But gaining Beijing's clearance may prove particularly tricky because of a strict, price-sensitive policy on overseas acquisitions.
Chinese authorities have halted planned investments in the past, such as Saab's failed deal with Hawtai Motor Group in May and Sichuan Tengzhong Heavy Industrial machinery's bid for GM's Hummer, which collapsed in 2010.
David Jolley contributed to this report.