6 Min Read
CHENGDU (Reuters) - The chairman of Chinese auto dealer Pangda Automobile Trade Co Ltd (601258.SS) is "confident" its planned investment in Saab will go through, clarifying earlier remarks he made suggesting the deal was void.
Pang Qinghua said the terms of the deal would still be subject to the bankruptcy administrator's review of the Swedish company.
"What I meant was that during restructuring, the court is authorized to adapt any restructuring plans, including vetoing previous agreements," Pang told Reuters on the sidelines of an industry conference in Chengdu.
"It's up to the one handling the reorganization to decide whether previous agreements are valid or not."
"I am sticking to the commitment," he said, adding, "Yes, I am confident about it."
His earlier comments casting skepticism toward the deal caused shares of Saab's parent company, Amsterdam-listed Swedish Automobile NV SWAN.AS, to fall nearly 30 percent following a temporary suspension.
After his clarification, the shares recovered most of the lost ground to trade down 4.35 percent at 1055 GMT.
Swedish Automobile insisted throughout the 245 million euro ($352 million) deal with Pangda and Zhejiang Youngman Lotus Automobile Co was still valid.
The volatility came as the administrator in charge of Saab's restructuring under court protection was reviewing the plan.
Swedish newspaper Svenska Dagbladet said the administrator could pull the plug on the process at any time, paving the way to declaring the automaker bankrupt.
Speaking to reporters earlier in the day, Pang said: "Now that it's in bankruptcy protection, all previous pacts are invalid. It's up to the court to decide. It can also find a new partner."
Pang added he did not know whether the Chinese side had submitted a proposal to the Chinese government regarding the Saab deal.
Despite Pang's comments, Swedish Automobile Chief Executive Victor Muller sent a brief text message to Reuters: "On track with both Pangda and Youngman."
A Swedish Automobile statement later said the confusion was based on a "misunderstanding," but it did not elaborate.
On September 30, Swedish Automobile said the Chinese partners were still on track to invest 245 million euros and take stakes.
But Swedish Automobile said the terms were still under negotiation because its shares had fallen in value since the deal's announcement.
Pang, asked later if Pangda would be interested in a takeover of Saab assets once bankruptcy protection ended, said: "I won't. My goal is clear. That is, I, along with my partner, will take over the brand and sell the cars in China.
"I don't even want to sell it globally. I want to sell Saab in China, maybe some neighboring countries at the most."
A spokesperson for Zhejiang Youngman Lotus Automobile Co declined to comment.
Saab has struggled for months to stave off collapse, seeking new investors and selling off assets to pay suppliers and employees and resume production at its plant in Sweden.
In June, Saab's owner signed a non-binding memorandum of understanding for Zhejiang Youngman Lotus Automobile Co to take a 29.9 percent stake in the company and Pangda to take a 24 percent stake, for a combined 245 million euros.
Saab has still not received a vital bridge loan of 70 million euros that was secured by Youngman, money considered key to its short-term survival.
The investment hinges on approval from the Chinese and Swedish governments and a green light from the European Investment Bank and Saab shareholder General Motors Co (GM.N).
Asked on Wednesday whether the deal had been submitted to China's National Development and Reform Commission for approval, Pang said: "Youngman's Pang Qingnian is the one that is supposed to send the application to the NDRC.
"As far as I know, he is soliciting opinions among industry experts regarding the deal. They are not done with it yet."
Pangda had paid 45 million euros to Saab for a separate deal to purchase 2,000 cars but had not received any cars because of a production halt since April.
"As for the cash injection (into Saab), I can do that only after the government approves the deal," Pang said on Wednesday.
Asked about the prospects for winning approval, he said: "I think the NDRC supports companies heading overseas: they come in and we go out. I think the government would be quite supportive on that front.
"When it comes to Saab, I think if it's in China, the government wouldn't let it collapse."
Gaining Chinese government clearance could be difficult because Beijing follows a strict and price-sensitive policy when it comes to overseas acquisitions.
Failure to gain Beijing's approval on time torpedoed a deal Saab entered into with Chinese company Hawtai Motor Group in May, while Sichuan Tengzhong Heavy Industrial Machinery's bid to buy GM's Hummer in 2010 also fell through.
Geely (0175.HK), which bought Volvo in 2010, denied reports last week that it was interested in Saab.
BAIC Group, another Chinese automaker, which owns some rights to Saab's old platforms, had no intention of becoming involved in the restructuring of the 60 year-old Swedish brand, Chairman Xu Heyi said this week.
Additional reporting by Alison Leung in Hong Kong; Editing by David Hulmes