Pangda Automobile To Issue 2.2B Yuan Of Bonds


High-end auto distributor Pangda Automobile Trade (601258) won approval from the China Securities Regulatory Commission to issue 3.8 billion yuan worth of corporate bonds, reports, citing a company filing.

The company will first issue 2.2 billion yuan worth of six-year bonds with a floating interest, five-year and seven-year bonds at  fixed interest rates.

The company had lost 45 million euros due to SaaB’s bankruptcy last year and had sold 22 properties for 175 million yuan late last year.

One month before SaaB entered bankruptcy protection, Pangda and Youngman Automobile Group had agreed to acquire SaaB for 100 million euros.

The acquisition bid failed because General Motors did not support the proposal on concern that such a deal will harm its interest.

A day after SaaB became bankrupt on December 19,  Pangda said it will make impairment provisions of 45 million euros which were already paid to SAAB.

According to company chairman Pang Qinghua, whether the loss can be recovered depends on the results of the final auction of SaaB’s assets.

Some industry analysts said the company sold its properties due to increasing pressures on its auto business and said the disposals could generate financial returns.

Pangda doubled its net profit from 600 million yuan in 2008 to 1.2 billion yuan in 2010, with compound growth rate of 45 percent in 2008, 46 percent in 2009, and 49 percent in 2010.

The company distributes 83 auto brands from the E.U., U.S., Japan and Korea. It has a six percent share of the market for Subarus in China.

Over the past year, the company opened a total of 410 new outlets and hired 8,000 employees.

Through the end of June, Pangda had a debt ratio of 77 percent and suffered from a significant rise in new investment and administration costs.

The firm, which has no core technology, mainly engages in sales of automobiles and maintenance services with profitability highly related to auto markets.


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