Our Daily Saab: The Chinese Deal
At Saab, which is working (well, not really working) under court protection from creditors, the big question is: “Did the money come in?”
The money is the €70 million ($93 million) promised by the Chinese bus manufacturer Youngman as a bridge loan. Saab needs cash desperately. Court protection means no new loans. Cash is king. No cash has arrived from China. Saab is not the only party in Sweden that is waiting for answers from China. Sweden’s National Debt office is waiting for answers also. Let’s have a look.
Reuters reports that Saab “has not yet received the 70 million euros ($93 million) worth of bridge financing it needs to survive while it restructures under court protection. This according to Saab spokesman Eric Geers who told Reuters:
“The money has not come in yet. We originally thought it would take about two weeks. The process is ongoing, and we will give information as soon as we have the money. It is hard to say exactly when this process will be finished. But it will be soon.”
The loan is in exchange for a non-exclusive license of Saab’s (unfinished) PhoeniX platform. The money was expected by September 25, but it’s not here. Not much will happen in China this week. It’s the October holidays where anybody who is somebody in China celebrates the birthday of the PRC by traveling to the beaches of Thailand, or shopping in Tokyo. The only one seemingly left is your solitary scribe.
Also waiting for word from China is Sweden’s National Debt Office. They want to reach an opinion on Youngman, needed to approve a $320 million investment into Saab. For that, the NDO needs financial information. Said Anna Petre of the National Debt Office to Dagens Industri:
““It is slow. A family-owned Youngman is not accustomed to disclose sensitive information about economic figures such as sales and profits. I asked to get revised financial statements from them. And they asked what I mean with ‘revised.’ They work in different ways than we do.”
I can only imagine the terror that request caused at Youngman. Many Chinese companies don’t even publish a list of their products out of fear that the competition will find out what they have. A foreign government agency asking for an updated P&L? Horrors! Everybody, hide!
That information is crucial. Dagens Industri says:
“By the end of this week, the information must have reached the Debt Office to enable it to make a decision before 14 October. This is when a decision is expected from China to allow Youngman and Pang Da to invest $320 million and become the majority owner of Saab.”
By the end of this week people start coming back from vacation in China. Slowly.
Saab’s schedule, as compiled by Dagens Industri, is tight, very tight, and it does not allow for the customary Chinese delays. Never negotiate with the Chinese while looking at your watch or calendar.
NDRC approval in two weeks? Sure.
I don’t have Victor Muller’s balls.
If that timetable would apply to me, I’d stay in Thailand, and buy a new phone.
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