IMPORTANT NEWS: National Electric Vehicle Sweden has agreed to buy the assets of Saab Automobile and the sale is expected to be finalized during the summer.

Friday, September 9, 2011

Talks with Pang Da and Youngman on wages

The Wall Street Journal reports that according to Saab's CEO and Chairman, Victor Muller, there are now talks going on with Chinese partners and investors Pang Da Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co. on securing wages to remove the immediate threat of bankruptcy.

"If, for instance, Pang Da and Youngman would be able to pay those funds to the employees or another party, that would change the game, right? That would take away the threats from the unions," Muller said to Dow Jones Newswires.

As far as I can understand neither Saab's current owners nor the Chinese partners and future owners want bankruptcy since there are too much values at stake, and even more important the risk that a bankruptcy will shut down Saab for good.

Question is how much wiggle room do the Chinese companies have before the Chinese authorities puts its foot down.

Chinese companies can not make foreign investmenst without approval from Chinese authorities. According to Victor Muller, the decision from the Chinese authorities concerning Pang Da and Youngman's planned investments in Saab is probably only four to six weeks away. A decision that can secure Saab EUR 245 million and new life. But until then a bankruptcy must be avoided at all cost.

So far the Chinese companies have worked around the rules by paying for cars in advance. Which brings me to next piece of news.

Also in the news from yesterday is a confirmation that Vladimir Antonov owned CPP Global Holdings is still very interested in aquiring the Spyker sportscar marque.

“We signed a memorandum of understanding that has now lapsed but we are still very much committed to the purchase and would very much like to carry on," Jon Chester CPP's product and brand director told Birmingham Post.

The sale of the Spyker sportscar subsidiary was supposed to bring in EUR 15 million to Saab (and EUR 17 million in future profits from Spyker), which is more than enough to cover wages. If this deal can't be followed through immediately, then my suggestion is to put up the Spyker sportscar subsidiary as collateral for another advance payment for cars to China. Or is the problem that the subsidiary has already been used as collateral and thus can not be sold before this plegde is released?

Also worth noting now is that Saab in a press release says that it aims at filing an appeal on the District Court’s decision to reject the reconstruction on Monday. The Court Of Appeal may or may not decide to look at the case. The District Court judges have said that it was a very difficult case and that the ruling wasn't obvious. And from that we can hope that the Court Of Appeal will decide to look at the case and even that it is not obvious that its ruling will be the same as the ruling of the District Court.