Bridge loan part 3

Yesterday we posted news on a speculative rumour about the two Chinese partners of Saab (Pang Da and Youngman) willing to guarantee a bridge loan for Saab, in order to allow Saab to restart production.

Now the plot seems to thicken. According to ShanghaiDaily.com, Mr. Pang Qinghua, chairman of Pang Da, sees no more bankruptcy danger for Saab.

Pang Qinghua, chairman of Pang Da, yesterday told Shanghai Daily that they have not submitted the application to the National Development and Reform Commission, China’s top economic planning body. He did not give further details.

But he said Saab was not in danger of an imminent bankruptcy as its chief executive officer [Mr. Muller] was in China yesterday to coordinate rescue efforts.

This is still a non-confirmed rumour, but more and more fingers point in the same direction.

Thanks to SaabLog-In for the tip.

60 thoughts on “Bridge loan part 3”

  1. And Just Auto reports

    “Reliable sources in the Far East have confirmed to just-auto Saab received a cash injection yesterday (1 September) sufficient to cover employees’ August salaries.”

  2. I’m getting confused. Pang Da have not submitted an application to the NDRC, so does this mean that the Youngman Pang Da deal to build Saab’s in China is not going to happen?

    Off topic, but relavent to Spyker, is that CPP who build Spyker cars at 7 stars industrial estate in Coventry, is buying some of the old Browns Lane Jaguar plant. Some regular names appear in the BBC article.

    • From my understanding of how things work in China, if it’s above the legal limit it has to be submitted, othwerwise no deal can go forward.

      Not submitting the deal for approval plus the bit of “Reliable sources in the Far East have confirmed to just-auto Saab received a cash injection yesterday (1 September) sufficient to cover employees’ August salaries.” worry me… What’s been appearing in the press is too much “bits & pieces” and not about a comprehensive solution… Let’s see…

    • How would they look in front of NDRC if they would submit a serious application and afterwards Saab would go bankrupt / fail ? As {censored}. So imho they will submit to NDRC after the short-term financing will be 100% resolved, with or without their help.

    • “Pang Qinghua, chairman of Pang Da, yesterday told Shanghai Daily that they have not submitted the application”

      Do you think something has been lost in translation?

      I found this quote from China Daily

      “We’re optimistic about the deal getting approval from the National Development and Reform Commission (NDRC) as we believe it is in line with government policies,” Wang Yin, Pangda’s board secretary, said on Thursday.

      The two companies plan to submit the application in the next two weeks, he said.

  3. TTAC (which isn’t always very authoritative) wryly observed that Saab was in no imminent danger of bankruptcy simply because VM was in China, and therefore not in Sweden, and therefore not able to sign papers 🙂 It made me smile, at least, if that was the worst that they could think of to say about the situation!

    Peter95: the China Daily quote is certainly a lot more optimistic-sounding than that in Shanghai Daily which was, I believe, a verbatim quote of a Bloomberg wire piece.

    O/T but interesting: why (genuinely) is it so hard to translate Chinese into English, and vice versa? It obviously is, so I’m not being critical of anybody, but I’m intrigued to understand the linguistic and idiomatic challenges.

    • Well, ont that O/T bit… If the translation from Swedish to English and vice-versa sometimes gets really weird, I can’t even imagine what translation mistakes one could get from languages that are so different, such as Arabic or Mandarin :/

  4. TTAC need to read a little bit how it works before writing! 🙂 They dont need VM to put SAAB in bankrupcy since you do it thru the court system!

    • The first step is to ask somebody from the company to accept it and sign the papers. If that is not possible you can try other ways.

      When Muller isn’t there it buys them some extra time. It was the same story when a supplier asked for bankruptcy of Saab Tools. they tried to contact Muller (because he can sign). But they could not reach him.

    • I thought that was a joke by TTAC, almost saying “sorry, we couldn’t come up with anything really terrible to say about this”. Perhaps I credited them with too much intelligence and/or humour?

  5. Gents – as we all sit here contemplating the clock is most definately still ticking ! It just seems to me that china deal is taking too long – why would a company act as guarantor or banker on a deal which has not been signed off by the govt yet ? Euro banks coming in on bridge loan – brave boys given the financial woes of the current balance sheet – too many half truths and rumours around for my liking. FACT this needs to be sorted by early next week OR the alternative is not good ….

  6. It may be something to do with saving face? If Mr Pang were to submit details of the proposals to the NDRC and then Saab were to go into administration it might look as though he hadn’t exercised due diligence, which would be embarrassing. So he must be awfully sure that the near-term future is secured first.

  7. Funny how these two quotes aren’t mentioned:

    Pang Qinghua, chairman of Pang Da, yesterday told Shanghai Daily that they have not submitted the application to the National Development and Reform Commission, China’s top economic planning body. He did not give further details.

    And

    A Bloomberg News report quoted Pang Da’s spokesman Wang Yin as saying Pang Da and Youngman may submit the application to inject funds in Saab to the NDRC in the next two weeks.

    Phone calls to Pang Qingnian, chairman of Youngman, were not answered yesterday.

    Don’t think there are “lost in translation” issues because the interview was done by the source of this story. It is not some kind of weird Google Translation. Why has Pang Da not sent the request to the NDRC?

    These kind of things take a lot of time and after that the rest of the circus has to approve (GM, EIB, Sweden etc) and we all know how quick they are…

    • The NDRC is quite slow, isn’t it?… Was it 1 year for the Peugeot deal I read on a comment in here somehere?…

      To me it seems these guys are betting on keeping SAAB almost comatose and on life support until it is convenient to pull the plug… Something I’ve been wondering is if their aim isn’t to go for the engineering assets alone…

      • Keep in mind that both Pang Da and Youngman probably have better contacts at NDRC than all of us here combined. I expect them to know how long it would take for NDRC to process an application of this nature (and that they have planned accordingly).

        The engineering assets would be of less value if the production of cars in THN ceased. The two activities seem inseparable.

        (But in answer to your question: Yes, someone did mention that the Peugeot deal took a year)

        • Why would production and engineering be “inseperable”? Those to entities can work alone.

          Engineering is doing things that will go in production in a coupel of years. Production is doing things that have been engineered years ago.

          There are lots and lots of independant engineering companies that don’t produce cars. So your argument is no argument.

          • @Pedro

            The engineering is not an asset, sorry but I’m an engineer and I hate when a bean counter calls me an asset.

            Volvo is doing anything possible to convince those guys to go to Göteborg, what do you think they would do if you would split Saab engineering from Saab Automobile.

            The engineers are at Saab because they design Saab cars.

          • @ Red J – The word “assets” can mean (and was used) as the set of Engineering and R&D activites that can easily be arranged as a stand alone company. I did not mean to offend you, of course, so please interpret the word “assets” in my comment as a synonym to the word “resources” or to the expression “people, other resources, and processes”. Whatever definition is less offensive to your personal sensibility.

            As for the Volvo comment, I am sorry but I don’t understand it one bit:
            Nr.1 Of course Volvo is trying to hire SAAB people! What would you expect them to do? To see BMW, Audi, MB, or any other car builder hire extremely well qualified people that live in what is almost Volvo’s back yard? I’m sure you agree that not looking into SAAB staff would be really stupid of Volvo, wouldn’t it?
            Nr. 2 SAAB’s engineering, being set up with a proper funding structure would be, in my eyes, a perfectly viable entity. Again, a lot of experience and extremely well qualified peolpe there.

          • I was thinking of engineering of Saab in total. It would seem strange to design a complete platform and car in THN only to have it manufactured somewhere completely different. Without access to nuts and bolts locally, prototyping would be a challenge, no?

          • @Pedro,
            sorry but I was a little bit upset, because of an other commenter.
            What I meant with Volvo is, people from the Engineering are staying at Saab till the last second because it is Saab, if they had to work as a Lotus Engineering, Porsche Engineering, Magna or whatever other Engineering company you may know, many of them would to somewhere else, to Volvo maybe.
            This is the reason why I don’t think that Engineering and production can live without another.

        • Engineering and production are not inseparable at all. Think about the engineering work that Lotus does, or the systems work that Magna does, and you get a good picture of what I was saying. 😉

    • Boe,
      This post was not about the application to the NDRC, so there is no need to mention it here.

      And I don’t see this application to the NDRC as the problem now, as Saab has much bigger problems to take care about.

      Funny to see how you think that you can always go OT.

    • Don’t think so. If you want to ask for bankruptcy you have to file it first with the company. They have to “accept” that you want to ask for bankruptcy.

      If nobody wants to sign (or can sign) you have to ask the court to do it. Otherwise everybody could ask for bankruptcy for everybody. And now Saab is “warned”.

  8. BoeBoe, You are wrong. The union will and can go straight to the court. Other persons need to go to the company signer, same as plastal did.

  9. Is it typical in Sweden to be paid only once a month? In the US, paychecks are issued weekly. Sorry if it’s off topic, but I’m surprised to read that salaries are paid monthly, and have been wondering about it for quite some time. Thanks!

    • Here in the UK, only ‘casual’ or very low-paid jobs tend to pay weekly; most jobs, especially anything longer-term and ‘serious’, are paid monthly.

      In effect, weekly pay here is reserved for those who might be assumed to lack either (a) the financial management skills, or (b) the creditworthiness to manage on month-in-arrears payments and perhaps an overdraft facility to smooth the bumps.

      I would imagine Sweden is broadly similar.

      • Most if not all of Europe, I think. Even very low paying (i.e., minimum wage) jobs such as in coffee shops, restaurants, etc. are paid monthly here in Portugal.

    • In the US it varies widely. State jobs typically pay out every two weeks or monthly. I tend to agree with skwdenyer in thinking that the weekly paying jobs are the ones they are afraid you will leave due to lack of interest or because something better comes along. They want you hooked on the weekly paycheck so you don’t stray. I worked one of those once.

    • Naturally, every country has different relative costs.

      Here in the UK, the vast majority of expenditure for many people is housing, heat, power. These costs are usually paid monthly, and fit with the monthly payment cycle. When I worked for a firm who paid four-weekly, it played havoc with some of those things (because there would be 13 ‘months’ in the pay year, so each month there would be less money than otherwise available for the monthly bills). Debt repayments similarly are usually monthly, as are credit card bills, car in insurance payments (if not paid-for annually), car payments (if on credit), and so on.

      As more and more people have moved onto monthly pay, so more and more people in the UK have taken up credit cards to help with the budgeting. The downsides (when banks unilaterally increase credit limits, the temptation to spend becomes greater, and so on) are clear to be seen in the level of UK consumer debt!

      In countries with either (a) lower housing costs, and/or (b) less expectation of credit (be that car insurance spread over 12 months, credit cards, loans, etc.) then not being paid monthly makes more sense.

    • I should also add that, having run several businesses with weekly payrolls, it is much harder to deal with supplier payment delays – banks’ own credit facilities tend to assume monthly payrolls, and therefore factor in that ‘interest-free borrowing from the workers’ implicit in monthly pay.

  10. Every day I´m waiting some positive news, but still not come. Only negative news… When I look back 3-4 months, there is not any positive news. My question is, what is doing VM? Why don´t say anything to Saabs enthusiatist? I think with some chinese dealer is not future, it is not partner for SAAB. Only say we work day and night hard. So many people work day and night… Yesterday Timr wrote very nice about Saab cars. Today norbotten canceled order for 50 police cars and ordered Volvos… I think this is another black friday for Saab, I´m so dissapointed, but there is not any Saab future, can´t be… Don´t want be so pesimistic, have a nice weekend and trust for one POSITIVE news for Saab future. I love Saab!

  11. I think you will find that VM will appear over the horizon riding the missing race horse Shergar and with Lord Lucan carrying a bag full of money. For those not aware both went missing many years ago and were never found

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