Struggling carmaker Saab said it would restart production by noon on Friday after an idle of almost two months due to a cash crunch, in time for a first visit by would-be Chinese partner Pangda <601258.SS>.

Loss-making Saab was pushed to the brink of collapse as it ran out of cash to pay suppliers in early April, halting production on April 5 and leaving Dutch owner Spyker scrambling to line up new financing.

It (output) will begin before noon, said Saab spokeswoman Gunilla Gustavs. The company would initially produce a smaller number of cars to assess quality before production was brought fully back on line.

The auto maker has been in intense negotiations with suppliers in recent days and said on Thursday agreements had been reached with a sufficient number to allow for a resumption of output from its plant in Trollhattan, in southwest Sweden.

Spyker has chased a variety of solutions to resolve the cash crunch at Saab, bought last year from General Motors , but has had to wait for approvals from Swedish authorities and the European Investment Bank under the terms of an outstanding loan.

Chinese car distributor Pangda is waiting for regulatory approval at home as well for its planned rescue of Saab in a deal worth up to 110 million euros ($153.7 million).

Pangda, whose Chief Executive Pang Qinghua was set to visit the Trollhattan plant for the first time on Friday, has already provided Spyker with an advance payment of 30 million euros in exchange for Saab cars to be sold in China.

Pang also met Sweden's industry minister and the Debt Office on Thursday. Sweden has guaranteed a loan from the European Investment Bank (EIB) to Saab so has to agree to any shareholder changes, as does the EIB and former owner GM.

(Reporting by Niklas Pollard; Editing by Mike Nesbit)

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