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.

Tuesday, October 25, 2011

Youngman and Pang Da: Deal is still on

Latest news is that the Chinese companies Youngman and Pang Da say in statements that the deal with Swedish Automobile and Saab from July is still on.

On Sunday Saab and its parent company Swedish Automobile announced that they considered the deal with Chinese companies Youngman and Pang Da as terminated. Reason being that the Chinese companies had not lived up to their end of the deal. But now the Chinese disagree.

According to Reuters, Pang Da says the following in a statement:

"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."

Youngman in its own statement says that the company regrets that Swedish Automobile on its own terminated the binding equity deal. Youngman also said that it remains committed to its obligations.

"Just as we have indicated to Swedish Automobile and Saab many times, we are willing to continue helping Saab (and to) provide short-term and mid-to-long term funds through other means," the statement said according to Reuters.

That's what I call an interesting turn of events! Has Swedish Automobile's hardball play paid off, and made the Chinese lay aside their dreams of acquiring 100 percent of Saab?

At the same time Dagens Industri writes that their source claims that China's top economic planning body, the National Development and Reform Commission (NDRC), will not allow any other Chinese company to negotiate with Swedish Automobile over Saab.

"The NDRC would lose all credibility if it allows another Chinese company to negotiate over Saab. The commission has made its choice after a thorough analysis and it stands by the decision it has taken," the source said to DI.

If the Chinese and Swedish Automobile can agree and finalize a deal, there are other stakeholders which could stop the deal. One of these is General Motors. According to the resigning administrator of the Saab reconstruction, Guy Lofalk, GM has said that it will be the last stakeholder to make its decision.

But first order of business for Saab will be the October wage payments due today. Two-third of the wage payment will be covered by the government wage guarantee, and the last one-third must be covered by Saab. But Saab is said to be out of cash. Question is if the subscription deal with North Street Capital can save the wages.