Swedish automobile manufacturer Saab wants to terminate the 245 million euro (US$341 million) agreement signed on June 13 with China’s Pang Da Automobile Trade Co and Youngman Automobile Co. But but the Chinese companies say they still plan to honor their pact to take a 53.9 percent stake in the company.
In its announcement, Saab stated that the reason it chose to break the agreement was that Pang Da and Youngman failed to pay for its company restructure after Saab filed the restructure request in court.
In response, Pang Da chairman Pang Qinghua said that whoever filed the request should pay rather than the Chinese companies.
“I understand that it is difficult for Saab to pay such a large amount of money at the moment but it is impossible for us to take responsibility for this,” said Pang. Also, he added that “I must say that this is a unilateral decision by Saab. We have not yet received any formal notice from the company but in line with the terms of the agreement, it will not end before Nov. 15.”
Pang said that if Saab finally decides to cancel the agreement, the Swedish automaker will face financial chaos and risks bankruptcy at any time. The chairman stated that up to now Pang Da has paid Saab a total of 45 million euro (US$62 million) and had made provisions to cover the amount in case the automaker goes bankrupt.
Also, Youngman stated that it remained commmited to its obligations and regrets that Swedish Auto had on its own declared an end to the legally binding deal.
“Just as we have indicated to Swedish Auto and Saab many a time, we are willing to continue helping Saab (and to) provide short-term and mid-to-long term funds through other means,” it said, adding it is open to further discussions among the parties involved.
Saab was given court protection from creditors and bankruptcy claims in September for the second time in about two years and is deeply in debt to workers and suppliers.
Doubts over Youngman’s and Pang Da’s role in Saab’s future led the Swedish company’s administrator to ask the court to approve the restructuring.