Manufacturing News

Pang Da may lose Saab payments

Chinese auto dealer Group Pang Da Automobile Trade Co. has warned investors that it may have to write off the money it wired to buy vehicles from Saab Automobile AB as a bad debt.

In June, Pang Da and private Chinese automaker Zhejiang Youngman Lotus Automobile Co. agreed to invest in Saab, and also to build and sell Saab vehicles in China.

To date, Pang Da has given Saab owner Swedish Automobile N.V. 45 million euros (392 million yuan) to buy Saab vehicles, said Pang Da in a statement.

Earlier this month, two unions representing Swedish workers filed a court petition to enter Saab into bankruptcy procedures.

With Saab's bankruptcy in mind, Pang Da decided to prepare for the possible loss of its investment.

"We probably need to set up some provisions against the bad debt arising from our prepayment for the aforementioned vehicles according to Saab's operational and financial conditions," the company said.

China's largest auto dealer group, Pang Da achieved 26.8 billion yuan ($4.2 billion) in revenue and 409.8 million yuan in net profit in the first half of this year.

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