White Knights Live in Fairy Tales, Not in China

White Knights Live in Fairy Tales, Not in China

  • Investors holding out hope for bailouts are sure to be disappointed.

When was the last time you encountered a white knight? Hiding out from Hong Kong’s latest wave of the coronavirus, I haven’t seen a human for days, forget about getting rescued.  

China Inc. is probably feeling the same way — too many damsels in distress and not enough white knights to go around. More likely than not, many bailout deals will fall through, breaking our hearts and wallets. 

This sort of uncertainty is unfolding at Car Inc., which once shared a chairman with scandal-ridden Luckin Coffee Inc. The auto-rental operator has been flirting with not just one, but two state-owned car manufacturers for bailout money. On May 31, it entered a “non-legally binding” strategic partnership with Beijing Automotive Group Co., only to switch gears a month later to SAIC Motor Corp. After SAIC terminated that deal Monday, sending Car Inc.’s dollar bonds tumbling, the rental company decided to settle down with BAIC after all. BAIC will replace UCAR Inc. — controlled by the very same embattled former chairman, Lu Zhengyao — as the largest shareholder.