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Ooops! Pang Das and Youngman have too little money - reports

Tuesday, 08 November 2011
Saab Automobile business with the Chinese Youngman and Pang Da is reeling from GM's negative attitude towards it. At the same time the Chinese companies' financial muscle is being challenged.
GM's rejection of the deal for fear of its technology licenses in Saab falling in th hands of the Chinese, made Saab CEO,  Victor Muller hold a the telephone conference with Youngman and Pang Da.
The three will try to reach a new agreement where the two Chinese companies do not become the defacto owner of one hundred percent of Saab.

But financial power of the Chinese is to be challenged according to John Zeng, auto industry analyst in Shanghai reports Swedish business daily Dagans Industri.

"In order to save Saab, it is required that a minimum investment of $1.7 billion (SEK 11 billion) should happen. Neither Youngman nor Pang Da has that type of money. Youngman has very small sales volume. Pang Da was recently submitted 6 million yuan when they went public, but it is still far from the money required to save Saab, "said John Zeng to Dagans Industri.

It was in April this year that Pang Da was listed. Both shareholders and stock analysts are now wondering how the company has been able to burn the capital of 6 million yuan, about the same amount in Swedish kronor, in just six months according to China Taipei Times report Dagans Industri.

"It is not by the general report. Pang Da is now trying to bring in more capital, but investors want to understand what the money is to be used for before the company takes in more money, "said John Zeng.

According to analysts, Pang Da changed its focus to leasing as a way to deal with declining car sales, which in turn has to do with the state credit crunch, writes Taipei China Times.
"This year, retailers in China have not had it as good as in the past two years, although Pang Da is one of the major retailers, "said John Zeng.
Pang Da’s net profit fell over 10 percent during the first three quarters compared to the same period last year, writes Taipei China Times.
By Scancomark.se Team

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