Pang Da warns investors that it may write off Saab payments

Article by Christian A., on September 21, 2011

China-based vehicle dealer Pang Da Automobile Trade Co. has been cautioning investors that it may have to write off its investment on the vehicles of Saab Automobile as a bad debt. In June, private Chinese vehicle manufacturer Zhejiang Youngman Lotus Automobile Co. and Pang Da agreed to invest 245 million euros in Saab.

They also agreed to manufacture and sell Saab vehicles in China. The agreement is still awaiting the approval of Chinese authorities.

Currently, Pang Da has given 45 million euros to Swedish Automobile NV, the owner of Saab, to purchase the vehicles, the Chinese car dealer disclosed in a statement, according to Autonews.

Earlier this September, two unions representing Swedish workers filed a petition to the court to declare Saab as a bankrupt company. With Saab's bankruptcy in mind, Pang Da prepared for the potential loss of its investment. Earlier this month, Saab applied for protection from creditors, but was denied.

Saab owes August wages to its workers and around 150 million euros ($207 million) to its suppliers.

The company sought leave to have the case reexamined, pointing to, among other things, a promise of a 70-million-euro bridge financing which it received early last week through the aid of a guarantee from Youngman.

On Monday, a Swedish court gave Saab leave to appeal the lower court's decision which denied it protection from creditors – leading to a possible lifeline for the company.

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