Saab In Trouble Deep, Goose Cooked, Reputation Shot

If the Shanghai Daily isn’t hallucinating (their writing is pretty sober, if not sobering), and if their source is reliable (the source is Pang Qinghua, chairman of Pang Da, the yellow knight from China that was supposed to save Saab from the abyss,) then Saab’s goose is cooked.

Chairman Pang told the Shanghai Daily that “Pang Da Automobile Trade Co and Zhejiang Youngman Lotus Automobile Co have not submitted an application to the Chinese government to inject much-needed funds in Saab, increasing fears that the Swedish carmaker may drive into bankruptcy due to a cash crunch.”

Why does that mean that the goose is good for eating? Because Saab says so.

Words of wisdom from the mid-term report of the Swedish Automobile N.V.:

“Management is of the opinion that the continuity of the Group can be secured based on the conditional EUR 245 million agreed investment by Pang Da and Youngman and based on the interest shown by investors to provide further short-term funding as is currently under negotiation. Management has accordingly prepared the financial statements on the assumption that the Group will be able to continue as a going concern. However, if adequate funding for the Group cannot be secured timely, going concern can likely not be maintained.”

Well, folks, if Pang Da and Youngman haven’t handed in the paperwork yet, then that’s all, folks. Anything approaching timeliness is out of the window.

Months ago, we had been hearing noises of foot-dragging in China. We didn’t believe then that the paperwork would be handed in “within weeks,” and we don’t believe it now.

A Bloomberg report, printed verbatim in China Daily quotes Wang Yin, Pang Da’s board secretary, who said yesterday that Pang Da and Youngman “plan to submit the application in the next two weeks” to China’s National Development and Reform Commission (NDRC). His Chairman Pang Qinghua did not want to comment to Shanghai Daily.

A month ago, it was said that the paperwork would be handed in within weeks, and it wasn’t. We provided the Chinese-English translation:

“Now this is China. ‘Likely to submit’ means: ‘Maybe we will, maybe not.’ And ‘within three weeks’ means: ‘Don’t rush me.’”

Even if the paperwork is finally submitted to the NDRC at some point far away in the future, then that’s only one of a number of government agencies that have to say “hao” to the project and put a bunch of big red “chops” underneath if and when they think they should. Another agency is the Ministry of Commerce. The two companies have yet to set a date to submit an application to the Ministry, Wang said. Bu hao, no good. They all need to sign off, and a missing stamp by one can derail the whole exercise. Running down the clock is an art form that has been perfected in China over thousands of years. If you are in a hurry, then you are out of luck in this game

Even when all ducks are in a row, they tend to waddle slowly. A month ago, we reminded our readers:

“The joint venture between PSA Peugeot Citroen and China’s Chang’an took a whole year to get all necessary official blessings. The fact that Chang’an is a state-owned enterprise, one of China’s largest automakers, and owned by government-owned China Weaponry Equipment, did not speed up the paper-shuffle.”

Bottom line: It doesn’t look good. Reassuringly, Pang Qinghua told Shanghai Daily that “Saab was not in danger of an imminent bankruptcy” simply because “its chief executive officer was in China yesterday to coordinate rescue efforts.” Meaning: As long as Victor Müller is in China, he can’t sign papers in Sweden. Now that’s nice.

There is another rumor that is making the rounds: Youngman and Pang Da would guarantee the famous bridge loan. CNBC heard it from Reuters, which in turn heard it from Sweden’s Dagens Nyheter. Even the faithful at Saabsunited, which usually cling to the thinnest tread of hope, didn’t want to buy into that story:

“I would say this is a speculative rumour as I can’t even find the article from Dagens Nyheter they talk about.”