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 2, 2011

Youngman and Pangda to seek NDRC's approval this month

According to Bloomberg, Chinese companies Pangda Automobile Trade Co. and Zhejiang Youngman Lotus Automobile Co. will this month seek approval from China's National Development and Reform Commission (NDRC), China's top economic planning body, to make the planned investment in Saab. A binding agreement with Saab was signed in the beginning of July, but an approval from the NDRC and various other government agencies is needed for the agreement to be finalized.

"We're optimistic about the deal getting approval from NDRC as we believe it is in line with government policies," Wang Yin, Pangda's board secretary, told Bloomberg Thursday.

Wang Yin said that the two companies plan to submit the application for approval in the next two weeks.

The investment in Saab must be approved by various government agencies and the companies have yet to set a time to submit an application to the Ministry of Commerce, Wang said.

According to Shanghai Daily, Pang Qinghua, chairman of Pangda, yesterday confirmed that they have not yet submitted the application to the NDRC. But he said Saab was not in danger of an imminent bankruptcy as its chief executive officer was in China yesterday to coordinate rescue efforts.

So what does these reports mean? One might ask why the Chinese didn't submit this application several weeks ago?

Could it be that so far Pangda and Youngman have been in close contact with the NDRC, listening to the wishes of the NDRC and forming the application after the guidelines of the NDRC and thus securing a better chance of success? That is my bet anyway, and if that is the issue, then the NDRC's handling of the case should be more smooth and quicker.

In addition they can have been waiting to assure that Saab is going to survive in the short-term before they submit the application.

It's also interesting to note that Shanghai Daily reports that Saab's chief executive officer, that would be Victor Muller, was in China this week to coordinate efforts to rescue Saab. Could this be linked to the reports that Youngman and Pangda will guarantee a SEK 1 billion loan to Saab from a major European bank?

Today it also became clear that the unions at Saab will at the earliest file for bankruptcy in Saab about one week from today, which means that Saab will get some more time to raise the needed money to pay wages and salaries and thus remove the immediate threat on bankruptcy.