Chinese auto dealer Pang Da Automobile Trade Co. has warned investors that it may have to write off the money it paid to buy vehicles from Saab Automobile as a bad debt.
In June, Pang Da and private Chinese automaker Zhejiang Youngman Lotus Automobile Co. agreed to invest 245 million euros in Saab, and also to build and sell Saab vehicles in China. The deal is still awaiting approval from the Chinese authorities.
To date, Pang Da has given Saab's Dutch owner Swedish Automobile NV 45 million euros to buy Saab vehicles, Pang Da said 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.
On Monday, a Swedish court gave Saab leave to appeal a lower court's decision denying it protection from creditors, opening a potential lifeline for the company.
Saab, which owes August wages to its workers and some 150 million euros ($207 million) to suppliers, applied for protection from creditors this month, but was turned down.
The company asked for leave to have the case re-examined, pointing to, among other things, a promise of 70 million euros in bridge financing with the help of a guarantee from Youngman, that it received early last week.
Reuters contributed to this report