Saab Ends Agreements With Chinese Investors

Saab’s parent company, Swedish Automobile, said late Sunday in a statement that it was terminating the deal because the two companies, Pang Da Automobile Trading Co. and Zhejiang Youngman Lotus Automobile, “failed to confirm their commitment,” made in the spring, to pay a combined €245 million, or $340 million, for 54 percent of Saab, as well as “explicit and binding agreements” made Oct. 13 to provide Saab with bridge funding to help it through its reorganization.

Saab’s main Trollhattan, Sweden factory has not produced any cars since April, and Victor Muller, chief executive of both Swedish Automobile and Saab, is engaged in a high-stakes effort to keep the carmaker afloat.

In September, Saab’s own unions began court action that might have led to the automaker being declared bankrupt. Mr. Muller in turn had Saab placed under court protection as he sought to gain time for the Chinese investments to arrive.

But Pang Da and Youngman have since offered to buy all of Saab, and Mr. Muller refuses to accept that deal, with the Swedish company saying Sunday that the offer was “unacceptable.”

“However, discussions between the parties are ongoing,” it said.

Last week, the administrator appointed by the court to oversee Saab’s reorganization, Guy Lofalk, threw in the towel, saying the process should be halted because Saab lacked sufficient funds to continue.

Neither Mr. Muller nor Saab immediately responded to requests for comment.

Pang Qinghua, chairman of Pang Da, was quoted by Bloomberg News as saying: “All plans that are beneficial for Saab should be discussed during the reorganization,” and, “We have been in touch after the weekend announcement and continue to look at new proposals.”

Pang Da declined to comment, as did Youngman. People answering the phones at the offices of the general manager at both companies said that they had no information, and that any announcements on the subject would be made through their Web sites.

Hilda Wang contributed reporting from Hong Kong.

Article source: http://www.nytimes.com/2011/10/25/business/global/saab-ends-agreements-with-chinese-investors.html?partner=rss&emc=rss