Porsche/VW Saga

[bmer]

This was exactly the scenario I was afraid of and even mentioned it in my post back in April :

If they (Porsche SE) let Volkswagen AG buy Porsche AG it could lead to Porsche getting integrated into VW as its 10th brand and Wiedeking could lose the power struggle to Winterkorn & Piech.

 

[donau]

One of the benefits for being the 10th brand for VAG instead of an independent brand next to the 9 other brands might be that Porsche would be spared the fines for not meeting the CAFE standards with some of their models. As the 10th brand I would guess it would be counted as being part of the VAG corporate fleet of cars they manufacture. This would mean that Porsche would not have to build the cost of those fines into their car prices. For consumers that would of course be a good thing.

Another thing to bear in mind is that Ferdinand Piech has a solid history in automotive engineering side, including at Porsche between 1963 and 1971 when he was integral in the development of cars from the 906 to 917. I believe that he's got the best interests of the Porsche brand at heart (he is a Porsche). After all the reputation and legacy of Porsche is largely based on his work, support and successes in the racing efforts of the company. Some would argue that Wiedeking took the company in the opposite direction.

And of course, the Porsche family (Piech included) still has a +- 50.7% stake in all of the 10 brands, so it may not be as bad as it seems at first glance.

 

[EnI]

I wonder whether VAG will use its cas reserves to buy of PAG from Porsche SE, or will it forced to get expensive loans (several billions of Euros) to make the purchase.



Either way Volksvagen AG will be financially much weaker after this maneuver ... Either with much lower cash reserves (now at €10 billion), or deeply in debt (instead of Porsche SE) ...

The only point of doing this is VAG has better access to loans - since the company's liquidity is OK, revenues are good, and so is the cash flow. While Porsche SE is a holding without constant cash flow, revenues & liquid assets.

Basically VAG is taking over Porsche SE loans, and getting Porsche AG as a payment.

Holding (PSE) will still be family business (50% shares owned by Porsche / Piech families ... and 100% of voting rights) ... with one & only asset: ~51% share in Volkswagen AG.

While all the operative business in VAG (including the PAG) won't be a family business anymore. Since State of Lower Saxony (supported by unions) & Qatar Investment Agency will have significant shares (20% / 15%) - and the voting rights as well.

And since Ferdinand Piech (as a chair of the supervisory board) has a significant influence on VAG this story's end has a very sour taste for the Wolgang Porsche who will only "rule" withing not very important Porsche Automobil Holding SE.

All until Piech is gone from the VAG supervisory board ... And IMO that will be the next big battle ... How to remove Piech from the board, and bring in Wolfgang Porsche.

IMO Porsche vs Piech fight will just be moved into VAG place ... War for seats in Supervisory Board.

IMO this family saga is far from over ... Both egos (of Ferdinand & Wolfgang) are just to big to (be able to) peacefully coexist together.

 

[EnI]

Latest news:

• Porsche SE debt is officially "just over €10 billion", unofficialy "close to €14 billion"
• Porsche SE is expected to record a pretax loss of up to €5 billion at the end of the business year 2008/09 (July 31st)
• Volkswagen AG cash reserves are almost €11 billion
• To retain good credit rating VAG plans to get cash for Porsche AG purchase from issuing & selling new shares (€4 billion now, €4 billion later) - so capital increase instead of using cash reserves, or getting new loans
• VAG consolidation is expected to be over in mid 2011
• It is expected Volkswagen Group (Volkswagen AG) will be renamed to Auto Union AG when consolidation is over.

 

[coolraoul]

My God, Porsche's debts are absolutely gigantic!!


I absolutely love the idea of a renaming into Auto Union!!

 

[Centurion]

My God, Porsche's debts are absolutely gigantic!!

Not bad debt though. The whole lot is predominantly loans used to buy VAG shares which can be cashed out to repay most of the debt.

 

[SCOTT27]

Porsche SE debt is officially "just over €10 billion", unofficialy "close to €14 billion"
Porsche SE is expected to record a pretax loss of up to €5 billion at the end of the business year 2008/09 (July 31st)
Volkswagen AG cash reserves are almost €11 billion
To retain good credit rating VAG plans to get cash for Porsche AG purchase from issuing & selling new shares (€4 billion now, €4 billion later) - so capital increase instead of using cash reserves, or getting new loans
VAG consolidation is expected to be over in mid 2011
It is expected Volkswagen Group (Volkswagen AG) will be renamed to Auto Union AG when consolidation is over.

And Wendelin Wiedeking is quietly plotting his revenge against his outers in a stealthy ninja operation. "Das Auto Ninja assassin"

 

[NarutoRamen]

And Wendelin Wiedeking is quietly plotting his revenge against his outers in a stealthy ninja operation. "Das Auto Ninja assassin"

Auto Ninja "In Da Haus"

 

[EnI]

And Wendelin Wiedeking is quietly plotting his revenge against his outers in a stealthy ninja operation. "Das Auto Ninja assassin"

I'm sure after his NCC expires in 2 years ... not earlier.

But he can still - as a lecturer - give lectures around the world ... presenting some nasty Porsche AG / Volkswagen AG details.

Think about Bangle - he can't work for another carmaker for 2 years after quiting BMW, but he can give lectures about "personal mobility transportation" - something that was discussed within BMW FIZ & Board-o-M. So ...

Info can still leak ... So, C'mon, Wendelin, give us some nasty details!

 

[Sunny]

Not bad debt though. The whole lot is predominantly loans used to buy VAG shares which can be cashed out to repay most of the debt.

If you try to cash out 50% of a company you will get pennies on the dollar. You can't just dump that much in the open market. Which means you need to find a new buyer, I doubt that will be easy and even if they did, they will buy probably at a fraction of the market value especially given the car market. It will be like buying high and selling low, all your paper losses just became real.

 

[SCOTT27]

At least some information has begun to leak out , purely to his instinct to protect the Porsche brand against it's in house rivals and the removal of unprofitable ego trips - ie Bugatti Veyron and VW Phaeton.

So had Porsche regained control of VW , Then the Audi R8 would have been culled and Lamborghini could have been sold.

The question the business media are asking now is what car company will his form of revenge come from?

 

[aleks_16]

When Lamborghini will be sold could maybe BMW buy it???

 

[jack]

When Lamborghini will be sold could maybe BMW buy it???

bmw only likes to buy small british brands

 

[Gullwing]

My God, Porsche's debts are absolutely gigantic!!

GM had $173 billion in debt

 

[NarutoRamen]

GM had $173 billion in debt

Damn...

 

[aleks_16]

bmw only likes to buy small british brands

Is aston Martin small enough

 

[NarutoRamen]

Is aston Martin small enough

But it's not for sale.

 

[aleks_16]

But it's not for sale.

Then BMW have to wait or they take the italian ferrari killer

 

[NarutoRamen]

Then BMW have to wait or they take the italian ferrari killer

Lambo ain't for sale either. I don't think any exciting marques are for sale right now. The only way to get something now is for a hostile takeover.

 

[coolraoul]

If you try to cash out 50% of a company you will get pennies on the dollar. You can't just dump that much in the open market. Which means you need to find a new buyer, I doubt that will be easy and even if they did, they will buy probably at a fraction of the market value especially given the car market. It will be like buying high and selling low, all your paper losses just became real.

Exactly. This is why Porsche couldn't sell those papers and was facing bankrupcy. Put all that on the market, the result will be an instantaneous fall of the price.

VW's value would've shrink, possibly even allowing a hostile takeover because of the low price of each share! Which in returns is why VAG had to do smthg, and ultimately had to "buy" Porsche.