Youngman and Pang Da say agreement is still valid

Reuters reports today that Youngman and Pang Da think their agreement with Swan is still valid:

Pang Da Automobile Trade Co and Zhejiang Youngman Lotus Automobile Co said on Tuesday their equity agreement with Saab’s owner was still valid, a response to the Swedish company’s move to end the deal.

And further on:

In a stock exchange filing, Pang Da said it had never signed any bridge financing pact with Saab’s owner, but said it still intends to honour its equity investment obligations, including seeking Chinese government approval.

“The company has been exploring various options favourable to Saab during its restructuring process. But, before any new agreement is reached between the parties, we think the previous pact remains legally binding,” Pang Da said.

Pang Da, which had already paid 45 million euros as part of a separate car purchase deal with Saab, had made provisions to cover the amount in case the automaker goes bankrupt, it added.

In a separate statement, Youngman said it already paid an $11 million bridge loan in line with an earlier agreement along with its share of the payment for Swedish Auto shares, which had kept Saab afloat.

The company did not give an exact figure, but according to its proposed equity agreement, it was committed to pay 136 million euros for a 29.9 percent share of Swedish Automobile.

It was not immediately clear whether those funds could be retrieved in the event Saab was forced to liquidate.

Youngman said it regretted that Swedish Auto had on its own declared an end to the legally binding equity pact, but added it remained committed to its own obligations.

“Just as we have indicated to Swedish Auto and Saab many a time, we are willing to continue helping Saab (and to) provide short-term and mid-to-long term funds through other means,” it said, adding it is open to further discussions among the parties involved.

Of course I have to add my few cents on that.

First of all I think we have to look at Pang Da and Youngman seperately. Pang Da executed their financial help for Saab by ordering cars and paying those in advance. So when it comes to the latest bridge financing agreement they seem to be a bit out of the picture as it was not up to them to send money.

So those promised 70 million Euro bridge financing should have come from Youngman, who say they already paid $11 million (approx. 7,9 million Euro). My guess is that their point is that they paid at least a part of the promised sum so the agreement is valid. Given the delicate situation Saab is in this delayed payment could well be seen as an attemt to push Saab in a position where Swan may accept a 100% takeover bid for Saab. That did not work so in the light of another investor (NSC) showing up they return to the original plan claiming that they want to fulfill all the obligations because they don’t want to loose the deal completely.

To really judge this you would have to know the complete text of those agreements and if they are valid or not is surely is one of the main topics for the talks going on. reports that they learned through a source that NDRC will only let Pang Da and Youngman negotiate with Saab:

At the same time indicate a source for newspaper Dagens Industri that the powerful Ministry of NDRC in China will not allow any other Chinese companies to enter the Saab.

“NDRC would lose credibility if you allow another Chinese company to negotiate the Saab Automobile. The Department has made its choice after a comprehensive analysis and the decision is taken upholds, “said the source of the Di.

I know, that di and an unnamed source but to be honest this is no big news we always expected that to be the case. For Pang Da this is really a bad position because their aim always was to be the sole importer for Saab in China and from watching the way the story has been unfolding I would imagine that the 100% takeover bid was mainly driven by Youngman, who would benefit more from owning Saab. Some days ago I read somewhere that Pang Da claimed it was Youngman who were slowing down the process at the NDRC. But they are tied to youngman.

But again, that’s just my personal view.

However, it is crucial that Saab gets financing in. From the same article:

On Tuesday, Saab will pay salaries to some of their employees. The greater part is covered by the state security, but not all. According to Guy Lofalk there is nothing left in Saabs accounts.

Sure, that’s the reason why Saab needs the bridge financing. So let’s hope we see a positive press release today.

59 thoughts on “Youngman and Pang Da say agreement is still valid”

  1. Wasn’t it mentioned somewhere that the advance payment for the cars could be received by Saab conditional to them restarting production? So, were the only funds Saab received from the Chinese parties that portion of the bridge loan?

  2. UPDATE 1-Pang Da, Youngman say JV deal with Saab still valid
    Related News
    Tue Oct 25, 2011 2:14am EDT

    * Youngman says bridge loan, other payments already paid

    • i’ve read the announcement from Youngman.
      it says. 13/10 Youngman & SWAN signed a supplemental agreement for the bridge loan (signed in 11/10), that change the loan from 70M euro to 11m USD, they already paid the money.

      they also paid for the share of B company that JV by SWAN & Youngman.

  3. We’ve heard the story from Saab’s/VM’s earlier. Now we heard PangDa/Youngman’s side.

    The truth is probably somewhere in between…

  4. So, to sum it up, from what has been made public now it looks like Pang Da acted correctly and lived up to their part of the deal. It’s Youngman who have tried to force a 100% share takeover by first withholding the 60 million of the bridge finance deal and then, when Saab got into even more trouble after that, tabling a proposal that would bypass the current owners of Saab (and bankrupt VM in the process) by offering a laughable price for the share capital of Saab only. I would appear they did it in the wake of suggestions, signals or actions (such as the Geely stunt), intentional or not, in that direction from Guy Lofalk who may or may not be influenced by he Swedish government. Anyway, Lofalks words and/or actions apparently led Youngman to believe that such a bid could be succesful, given the strained situation Saab is in. That attempt backfired owing to Victor Mullers counteractions: the appearance on the scene of North Street Capital and the subsequent voiding of the original investment agreement. And now a collapse of everything looms on the horizon and Pang Da/Youngman are trying to rescue what can be rescued before someone else decides to invest in Saab.

    It would seem that Youngman simply interpreted the situation wrongly, tried to make a killing (in more ways than one), underestimated VM’s resilience and got their noses blooded. If true, it was a stupid, cowboyish course of action in my view, and also one that damaged Pang Da’s stature in the deal as well. But PD and Y have no choice but to go it together, given the position NDRC have taken, i.e. that Youngman is the only CAR MANUFACTURER in China allowed to negotiate a deal with Saab.

    I bet more than a few harsh words were exchanged in private between the PD Pangs and the Youngman Pangs over the last two weeks or so. And that PD would much rather work with some other, less cowboyish and more experienced car builder in this deal. But they cannot, so there they (and we) are.


    • I agree Ivo; that has been my impression as it has unfolded over the weeks.

      I think at some point it was mentioned that Svan/Saab had said that they didn’t need all of the bridge loan at once, but clearly small sums, 11 MUSD in total, is far from what has been mentioned (in public), the 70 MEUR.

      (Also, it has been mentioned that Svan is bound by an exclusive agreement, which says that they can’t negotiate with anyone else than Youngman and Pang Da until 15 November; what is up with that?)

      • So, as fido reports, Youngman now says that the bridge support agreement was changed in the sense that it was reduced from 70 M to 11 m and that thay have diswcharged their obligations so that there is no reason for Swan to terminate the original agreement.

        The other version is that the bridge support deal was amended in the sense that the 70 M wouldn’t be transferred as a lump sum but in portions or paid as needed so that Youngman didn’t fulfil their obligations. It sounds plausible since this was in the pre-reconstruction period when Kronofogden threatened to seize all the money that could be found n Saab’s accuns and Saab, et the time, needed those 11 M to pay salaries.


      • Yes the Chinese played it well, they have an exclusive agreement so they can just sit and wait til Saab goes bankruptcy and then buy the pieces for whatever they want to pay. Without getting the debts and all the mess.

    • I feel that this is close to the truth. I have no interest in SAAB partnering with Youngman. Sorry, Pang Da – you seem decent. Get a new investor in and pay back the Chinese companies. Youngman can go ahead and come up with the technology on their own rather than buying it on the cheap. There is no honor in your actions, Youngman.

  5. As some have written before, it seems that Youngman was only after the technology. I remember when there were doubts about the intellectual property ownership on the phoenix platform. Anyway, if the court doesn’t allow the reconstruction, all these well intended scenarios will worth zero. It would be great to hear something from the NDRC also.

  6. The Dutch radio station Radio Nederland Wereldomroep reports (no link, sorry, info was posted on Dutch Saabforum) that the Chinese authorities have now forbidden Y/PD to transfer any more money to Swan/Saab. That may also include the remainder of the 70 million bridge financing that Youngman so far reneged on. However, there were no sources given for confirmation so this may just be another uninformed evaluation of the situation by some less than expert journalist.


  7. If true, it might also be: don’t transfer any more money before we (NDRC) have come to a decision.
    Because the more money is being transferred, the harder it will be for them to say No.

  8. BTW I found a link for that piece of ‘news. YCan’t post it here because of rules on comments section, but easy to find if you google ‘Wereldomroep’ and browse through the news articles.

    It’s just a piece of Saab bashing by an ignorant so-called journalist. Seems very unlikely he knows something others don’t know.

  9. Ok, till72, thanks. No need for it, though. I asked the journalist what his source is, and he referred to
    The article on just states that teh NDRC hasn’t made a decision yet about the deal between SWAN and PD and Youngman, which we all know to be correct. He just misinterpreted the article on

  10. The evaluation of Till72 is correct, but I think you have once to think about Chinese mentality. Chinese are inclined to be traders using all opportunities at the time given. I have followed management seminars in China and I therefore believe that I know what I am talking about. It is absolutely correct that Pa Dang had a sole interest to be a seller of Saab cars as a business opportunity to itself. The installment payment is proof of that. Then Youngman came in as a partner for production of Saab cars for the Chinese market and Pa Dang thought to multiply its business opportunities as an important car dealer in China. I guess that Youngman and Pa Dang don’t have the same business conduct and this is why the deal somehow detered becaus Youngman had other interests to pursue and this is acquiring Western Saab technology paying a low price for it. But not to loose face it stayed for a while with the original contract and presented it also to Chinese authorities. Chinese authorities are inclined to weight national interests and that is to upgrade its own automotive industry as it does in other branches of industry. With the trader mentality they always thought to get rid of their initial partnership with Pa Dang in order to secure a more advantageous agreement for themselves and leaving Pa Dang out in the blue disregarding the financial means already invested by Pa Dang to Saab. Because of this intent the fouled up the agreement and then when Saab was obligded to file for a new settlement in line with Swedish laws they thought that their initial intent to get control of Saab at a very low price emerged, helped in addition by the official installed to pursue the volontary restruction process of Saab. At that time this official saw his opportunity to make a lot of money playing a double role – whether this is true or not – it looks like. Taking this further when he was demasked he was trying to get himself out of the ditches and he asked the court to terminate the voluntary restruction plan of Saab. So VM was duped in a multifold action by the untrue Chinese Youngman and by the officially installed officer of the restruction plan. In addition there was also a foulplay by the Swedish Government. If you picture all together Saab and VM never had a chance to overcome all of these criminal acts. So far, only the court was able to sort out things and the other governmental or EIB bodies were at loss of understanding and therefore also acting. When VM became aware of what was going on the only solution was to cancel the original agreements. This left Da Pang in the blue and this is why they confirm to stick to the original agreement in order to protect themselves should Saab really fall into bankeruptcy. In that case Da Pang is falling to the lot of the creditors of Saab with no priviledge to be adhered to a special class of creditors. If this is credible you can understand the movements of the two Chinese companies and also the actions taken by the official responsible to survey the reconstruction plan of Saab (in his own interest). Therefore it will be very crucial what the court decision is going to be to the destiny of Saab. If we eliminate all the unfaithful actions the court will decide on facts presented to the court by Saab and then to sort out all the documents available and trying to come to a conclusion that might be a ruling in favour of Saab to let the company survive. However, in my opinion the court has no means to influence the Chinese parts, it has to stick to Swedish bankruptcy law and if those conditions are fulfilled by Saab to have a voluntary reconstruction they will accept the case and let Saab doing his reconstruction. It is in this process also understandable that Swan and Saab and VM is continuing the talks to the Chinese with weight on Pa Dang because there at least some money was following the contract and therefore it is binding. All said it does not mean that Pa Dang can meet its obligations to make further payment installments because it bound itself in another contract also with Youngman, but definitely the downpayments of Da Pang confirm the initial intents of the contract and Saab would have to deliver the cars ordered, but this is a contractual agreement based upon the Swedish civile code and thus only indirectly influencing the court of bancruptcy. Therefore it is clear that Da Pang and Saab are in a diffent situation than Youngman. Youngman has less to loose than Pa Dang and the court will definitely not allow a take-over at Saab if not all the committments are not covered. So you might see that also the courts decision finding is not an easy one, not to speak about Saabs position. I hope this helps to make the situation from the juridical standpoint more clerar. I myself only hope that there will be justice for Saab, VM and Da Pang and that Youngman will be punished for its foulplay. However we are running against time for Saab to continue to produce cars and to fulfill the original agreement with Da Pang. It is a sort of a deadlock only lawyers and courts can solve but their speed is not the one of Saab cars, unfortunately!

    • I agree with this assessment. It adds knowledge of the local business ‘culture’ and so makes our earlier analysis even more plausible. Well done, ebolie-21.

      I keep having those nagging doubts about the true role of mr. Lofalk, the more so now we know about his own financial incentives to see Saab sold.


    • Ebolie-21 + others

      I don’t want to come across as a bore but I am not sure that it is right to accuse people of ‘criminal acts’ without proof. As well stating that there were ‘criminal acts’ you also mention that Lofalk was double dealing in order to make a lot of money as well stating that the Swedish government was guilty of foul play…..
      Personally I think it is fine to question people’s motives, morals, competency but when you start using legal terms and making judgements without facts than you are on unsafe ground…..

  11. Is it just me, or this the “game” the Chinese are playing, just getting more and more expensive, for the Chinese!?
    By every month that goes by, Saab has to pay even more hundreds of millions of SEK, in salaries, to the employees. This only raises Saab’s debth, and thereby also the money any new owner will have to pay back, to the SweGov.
    Instead, I would have put my money into the company as fast as possible, to get cars produced instead.

    So all in all, I don’t think that the Chinese are acting very clever – although I’m sure that they think that themselves.
    I hope their strategy backfires, and Saab is sold to someone else!


    • They could be delaying specifically to drive up debt, so that SAAB is liquidated and the assets are auctioned off, in which case they get the prototypes, tooling, and IP all at a very tiny fraction of what it cost to research and design.

      • I don’t agree. In a bankruptcy situation they could never be sure that they will be able to acquire what they want. It’s a free-for-all auction and the highest bidder wins. That doesn’t necessarily have to be Youngman, many others are interested in Saab technology and research as it can save them billions on R&D.


        • ivo
          Also Pang Da primarily want to distribute cars not build them and Youngman know about as much about car building as Saab does about making rickety busses for the Chinese market and so that would need to buy the knowhow as well…

          • But you are both right in not agreeing with the above comment, IMHO. πŸ˜€

            Some, and even some journalists, well no surprise there, seems to be of the opinion that that is how it is done. You pick the pieces cheap. No way. They have no priority, being first in line. As Ivo said; in a bankruptcy it’s the highest bidder for every little piece they can sell; the better for the creditors, more to everyone. So I don’t understand where people got that idea about pushing for bankruptcy.

        • Actually, Youngman build some pretty good buses under licence from MAN. And they also assemble passenger cars in serious quantities. Just go and see their website. So I’m pretty sure they are very, very, VERY interested in getting hold of advanced automotive tech. It would give them the opportunity to design and build modern cars of their own which may well become a hit on the Chinese home auto market which features some pretty obsolete and/or weird products. Lots more profit in that than in assembling cars for others.


          • Building under licence is VERY, VERY different from building your own cars!!!
            Plus If they wanted to get hold of tech then they need Saab pre-bankrupcy as much of the tech will revert to GM if Saab goes under.

          • Exactly. Which is why I don’t subscribe to the theory that they want Saab to go belly up, they need to be sure to get the stuff they want. If they don’t then they will probably never build a car they designed by themselves.


  12. It appears the Chinese have made the mistake that Victor really cares about saving SAAB. Victor is a businessman, SAAB is a perishable good. If there is no upside to Victor selling it, and if the Chinese try and use strong arm tactics, he will let SAAB implode for several reasons. 1) it would hugely embarass the Swedish govt. (which has been USELESS) and b) there is no downside to him. Either he gets a deal that rewards him and makes him and his partners whole, or no deal. Like I said, he WILL burn the house down, and I think the Chnese just wasted millions more $$.

    • Well, that seems highly unlikely to me.
      If Saab goes bankrupt, Swan will have no value anymore, but lots of debts (for instance to VA).
      He won’t be able to pay those back. VM is committed to SWAN, and SWAN is owner of Saab. So, in that way he is committed to Saab. But, if someone shows up and buys Saab from SWAN for more than the debts of SWAN, he might be tempted.

      VM’s preferred scenario is that the Chinese become shareholders in SWAN and Saab prospers. That makes him prosper as well, of course.

      • Agree, I think this is all part of the negotiation and am hopeful that they will agree on a price that works for both parties, possibly for 100%.

  13. So Youngman is slated to be the only manufacturer by the NDRC. So why not stick with PangDa and their distribution network, and build all cars for the Chinese market in Sweden. North Street can maybe fill the missing $ void from Youngman. Just a thought.

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