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.
di.se 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 di.se 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.