Pang Das limited money needs not be a threat to SaabThursday, 10 November 2011
It was recently reported that the Chinese company, Pang Da interested in purchasing Saab automobile had limited money and that it could jeopardise the business from assisting Saab gain some breathing air.
Reports however hold that the shortage of money need not be a threat to Saab's Chinese future.
Many Chinese companies that bought operations abroad have been dependent on state aid.
Car dealership chain Pang Da wants to buy Saab Automobile with together with carmaker Youngman. But Pang Da has problems with liquidity at the moment, according to Swedish business daily Dagens Industri, referring to the Taiwanese newspaper Taipei China Times.
AdvertisementThe shortage is however reported to be meagre.
“Many Chinese companies that made acquisitions abroad, not only in the automotive sector, have been very dependent on help from Chinese banks to solve their funding,” says Frederic Cho, who is Chinese-advisor at Handelsbanken Capital Markets.
By extension, it means government money, as China's financial system is controlled by the state.
The key to Saab purchase lies with China's National Development and Reform Commission, NDRC. If it considers it important for China's automobile to buy Saab, they it will weigh heavier than any financial problems for Pang Da and Youngman, according to Frederic Cho's assessment.
He also believes that a positive response from NDRC increases the chance of a deal with General Motors about technology licenses for the Saab models which GM owns the rights.
By Scancomark.se Team
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