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.

Monday, June 27, 2011

The Chinese up the stake in becoming part owners of Saab

The last month and a half has shown that Chinese companies are anything but risk averse. They are playing a high-stake game to become part owners of Saab.

Back in 16 May, Chinese PangDa Automobile Trade Co. Ltd agreed to buy 1,300 Saab vehicles at the price of EUR 30 million. This was at a moment when Saab's manufacturing plant in Trollhättan had been idle for one and half month due to debt to suppliers. But despite this, PangDa paid EUR 30 million in advance for cars to be delivered five months later.

Then on 1 June, PangDa decided to increase the order with another 630 cars. This time paying EUR 15 million in advance. This was after PangDa had visted the Trollhättan plant and done a due diligence on Saab.

And finally, earlier today it was known that an unamed Chinese company, which I belive must be a company where both PangDa and Youngman is involved (maybe the planned joint-venture distribution company?), has decided to buy 582 Saab cars for a EUR 13 million advance payment. And this at a time when Saab is more or less insolvent and is balancing on the edge of bankruptcy.

This would mean that so far the Chinese stake in Saab is EUR 58 million. That is EUR 58 million that most likely will be lost if Saab goes bankrupt. In other words, the Chinese really believe in a future for Saab and believe that their planned investments in Saab will be approved by China's National Development and Reform Council (NDRC), which is China's top economic planning body. Why would they else risk several millions Euro?