Saab terminates contract with Chinese Investors. Youngman and Pangda willing to talk
A deal that was on the verge of collapsing last week itself, has finally reached its conclusion with Saab calling it quits. Saab has terminated their contract with Zehjiang Youngman Lotus Automobile Company and Pangda Automobile Trade Company.
The initial agreement for a $340 million investment is concluded due to unethical demands being made by the Chinese counterparts. The original contract with Saab had offered Zhejiang Youngman Lotus Automobile Co and Pangda Automobile Trade Co. a 53.9% stake in Saab at an investment of $340 million. The Chinese investors later stated that they would now require full control of Saab operations which was not agreeable to the Swedish Automobile company. Saab said they chose to terminate the agreement as Pang Da and Youngman as Saab has already filed for restructure in court, and the Chinese companies failed to pay the restructure.
Pang Qinghua, Pang Da chairman had this to say. “I understand that it is difficult for Saab to pay such a large amount of money at the moment but it is impossible for us to take responsibility for this,” said Pang. Also, he added that “I must say that this is a unilateral decision by Saab. We have not yet received any formal notice from the company but in line with the terms of the agreement, it will not end before Nov. 15.”
Unreasonable demands regarding 100% control of Saab Automobiles were unacceptable. Pangda and Youngman, Saab’s potential Chinese counterparts are now out of the deal. Saab has court protection from creditors but this will soon change. Once the protection is lifted, Swedish automaker, Saab is going to be forced into bankruptcy.
Pang Da has already paid Saab a $62 million, and made provisions to cover sum in of bankruptcy. Youngman maintains their commitment to obligations. In regards to Saab called it quits on their legally binding deal, he had this to say. “Just as we have indicated to Swedish Auto and Saab many a time, we are willing to continue helping Saab (and to) provide short-term and mid-to-long term funds through other means.” Youngman mentioned they were open to further discussions regarding the deal.