Supposedly, the idea of the Saab / Pangda deal was to skirt requirements to obtain Chinese government approval. As we have explained on the day the MoU (as Muller sees it) or contract (as Pangda sees it) was signed, it would be most silly to try to get around the Chinese government. They have a whole array of measures to demonstrate their displeasure if they don’t like a deal.
If ChinaCarTimes is correctly informed, the paperwork was barely dry and the Chinese government already made its annoyance felt. According to a CCT report, the Chinese government issued a warning to Pangda. The story is written in Chinglish, but this is what it seems to be saying:
On May 18, only two days after the Saab/Pangda deal was announced, China’s powerful National Development and Reform Commission (NDRC) summoned the Chinese automakers that might be involved in a manufacturing joint venture with Saab, and warned them not to get into a bidding war, because that would “hurt their own interests and benefit the overseas companies.” This is sourced on an anonymous source at one of the companies present in the meeting.
An observer who is not familiar with Chinese customs might think that this means that the deal is a go, but Chinese companies should simply not overpay. There is no need to tell a Chinese businessman to get the best deal. If that meeting took place, then the message was something else. These meetings run in China under the euphemism “invitation to tea.” If you are invited, your opinions are heard, and opinions by the government are expressed. There might be “recommendations,” nothing more. The overall signal is: Big government is watching you. Be careful. Maybe just drop it.
Dow Jones (via Morningstar) cites from an article that appeared in China’s Economic Observer. It comes to the most damning conclusion: China “won’t allow Saab to sign agreements with three companies–Beijing Automotive Industry Holdings Co., which signed a technology purchasing deal with Saab in 2009, Hawtai Motor Group Co. and Pang Da Automobile Trade Co.”
In related news, Pangda doesn’t seem to be the ultimate rich uncle from China anyway. Despite the China deal, Muller and Saab were still hoping on money from their Russian sugar daddy Vladimir Antonov. Antoniov was supposed to buy the factory building of Saab and lease it back to Saab. This would free up cash. However, the real estate secures a loan from the European Investment Bank, which was co-signed by the Swedish government. Both would have to approve the deal. They haven’t yet.
According to a report in Dagens Industri, “Saab Automobile is tired of waiting for the EIB to endorse Vladimir Antonov, and is now trying to sell the factory property to other investors.” A real estate broker has already visited Trollhättan.
Industry analysts that were quizzed by Dagens Industri think that Antonov is being frozen out of a deal that would make him a co-owner of Saab. Vladimir Antonov thinks otherwise and paints a happy face on the proposed real estate transaction.
“The more investors that want to contribute funds to Saab, the better” Antonov told Dagens Industri.
But then, who wants to own land, building, fixtures and improvements of a factory that has a tenant who is currently unable to pay suppliers? Saabsunited still thinks Vladimir would be best and started a letter-writing campaign to convince Fredrik Reinfeldt, Sweden’s Prime Minister, to let Antonov invest in Sweden.
PS: In a recent article, Saabsunited said that I “freely admit that my initials spell BS” (guys, they have been embroidered on my shirt pockets ever since I had monogrammed shirt pockets). At the same time, Saabsunited praised Chinacartimes for their “expert analysis.” Let’s see who’s on Saabsunited’s Christmas list now.
PS: In the meantime, CCT has cleaned up the Chinglish, which changes the slant of the story somewhat. If the story is right, the Pangda deal is in deep trouble. See yourself.