Saab may be fighting for the right to receive bankruptcy protection, but Pang Da – the Chinese auto distributor seen as a key to Saab’s survival – is apparently ready to write off its investment in the Swedish automaker as bad debts.
Though Pang Da is part of a $352 million USD deal with Chinese automaker Youngman Lotus designed to prop up the struggling Saab company, that deal has yet to receive approval from Chinese authorities. In the mean time, Pang Da had ordered cars from Saab to sell in China, a deal amounting to roughly $62 million.
That $62 million, Automotive News reports, may have to be written off as a loss, should Saab not win the protection from creditors it’s desperately seeking from the Swedish government. Two of the unions representing Saab’s workforce have lobbied the Swedish government to declare bankruptcy for the beleaguered company, and to pay outstanding debts through liquidation. Saab has struggled most of this calendar year to pay its employees, and production has ceased at its Trollhattan, Sweden plant for months due to parts shortages caused by overdue payments.
While Saab appears to be hoping for a victory, it seems Pang Da is assuming the worst. Automotive News quotes the automaker as stating it needs to “set up some provisions against bad debt arising from our prepayment for the aforementioned vehicles according to Saab’s operational and financial conditions.”
Saab applied last week for protection from creditors, but was initially denied such a shield. That said, Swedish courts recently granted the right to appeal the decision – a move which is by many seen as Saab’s chance at survival.
Source: Automotive News (Subscription required)