Porsche/VW Saga

[EnI]

As I predicted ...

Volkswagen, Porsche Need Foreign Investor, Lower Saxony PM Says

By Andreas Cremer


May 19 (Bloomberg) -- Volkswagen AG, Europe’s biggest carmaker, and Porsche SE should sell a stake in the company resulting from a merger to a foreign investor, according to Germany’s Lower Saxony, the VW shareholder with veto power.
The German state has no intention of increasing its 20 percent stake in VW after the carmaker’s planned combination with Porsche, Lower Saxony Prime Minister Christian Wulff said in an interview late yesterday in Volkswagen’s hometown of Wolfsburg. About 30 percent of the new company will be available to investors once the owners sort out its structure, he said.
“This is a considerable portion that would be open to many possible investors,” Wulff, 49, said. “We’re open to those investors. Lower Saxony’s role will remain the way it is now.”
Talks between the automakers to hash out details of a merger were put on hold after Volkswagen Supervisory Board Chairman Ferdinand Piech challenged Stuttgart, Germany-based Porsche’s finances and Bernd Osterloh, VW’s works council chief, asked to quit the negotiations. Porsche workers demonstrated yesterday against a combination with VW and demanded independence. The Porsche and Piech families together control 50 percent of Porsche, which in turn owns 51 percent of Volkswagen.

‘Easier’ With Unity
“Many things would be a lot easier at the moment if the two families were as united as Volkswagen, the state of Lower Saxony and the works council,” Wulff said after a campaign rally of his Christian Democrats attended by Chancellor Angela Merkel, VW Chief Executive Martin Winterkorn and Osterloh. “Unfortunately, the lack of unity is rather indisputable.”
Volkswagen fell as much as 2.33 euros, or 1 percent, to 222.72 euros as of 9:28 a.m. in Frankfurt trading. The stock has declined 11 percent this year, valuing the carmaker at 70.8 billion euros ($96.3 billion). Porsche rose as much as 2.77 euros, or 6.7 percent, to 43.98 euros.
Under Germany’s so-called Volkswagen law, Lower Saxony, which owns 20 percent of Volkswagen as its second-largest stakeholder, may block major decisions by the carmaker.
Piech’s counterpart at Porsche, Wolfgang Porsche, was struggling to raise financing to increase the holding in Volkswagen to 75 percent and had been at loggerheads with Piech about how to unite the carmakers. While Piech wanted to transfer Porsche’s car unit, maker of the 911 sports car, to VW, Porsche CEO Wendelin Wiedeking was pushing a proposal to merge the two automakers, a person familiar with the plans has said.

Family’s Agreement
The families agreed on May 6 to create an “integrated” car manufacturer that would put Porsche alongside VW brands including Skoda and Audi. Details of a combination would be decided in four weeks, Porsche said at the time.
Negotiations between Volkswagen and Porsche scheduled for yesterday were canceled at the request of VW’s Osterloh. About 6,000 employees at Porsche’s main Zuffenhausen plant and two other factories near Stuttgart joined a rally yesterday addressed by Uwe Hueck, Porsche’s top labor leader.
“There will be no talks for as long as they keep spreading hatred against Volkswagen,” Osterloh said in a separate interview. Asked whether the carmakers will meet a plan to decide on the new company’s structure by early June, Osterloh said: “We’re not sure yet but it could certainly become a bit difficult.”
Regardless of the current impasse, a combination of Volkswagen and Porsche would have “huge benefits” for jobs and growth, according to Wulff.
“Such a combination would promise unbelievable synergies,” Wulff said. “This could make Volkswagen and Porsche the world’s unrivaled No. 1.”
Wulff wouldn’t say who would be a likely investor in the sports-car maker. Porsche was in talks with Arab investors including Qatar’s Emir Sheikh Hamad bin Khalifa al-Thani, a person familiar with the talks said earlier this month.






Porsche looks for outside investor


Associated Press, By GEORGE FREY , 05.19.09, 03:44 AM EDT

German sports carmaker Porsche SE confirmed Tuesday it is looking for an outside investor, reportedly to help it pay off debt, after talks to form an "integrated company" with Volkswagen AG broke down over the last few days.

Stuttgart-based Porsche ( PSEPF.PK - news - people ) said Tuesday the likelihood that an outside investor would step in was good, and that the majority shareholders of the Porsche family were in favor of such a move, but made no further comment.

 

[Centurion]

So I guess they'll be issuing more shares to the public then.

 

[EnI]

So I guess they'll be issuing more shares to the public then.

As for now Porsche SE is owned 50% by Porsche-Piech families (although they have all 100& of voting rights), and 50% by private & institutional investors.

The new shares will be issued for a specific investor - like in Daimler case. So the PAH.SE will get some desperately needed cash for paying off its debts.

So, that means Porsche-Piech families will end up with less then 50% share in the company.

But the more important questions is: will they have to scarify some voting rights too? I guess so. But that means PAH.SE won't be exclusively a family business anymore. Ouch!

 

[Centurion]

I don't think they will have to give up any voting rights if they take an investment firm from the Middle East on board. Investors from that region tend to be sleeping and make little or no interference with operations. So I doubts that they will request a high degree of influence, especially when Porsche and VAG are very skilled at what they do.

 

[EnI]

Spiegel: Porsche came close to bankruptcy in March 2009

German Carmaker Narrowly Averts Bankruptcy

By Dietmar Hawranek, 25.05.2009


Luxury carmaker Porsche came very close to bankruptcy in March. Only a dramatic rescue operation saved the company, but it's still on the skids. Over the coming weeks, the sports car manufacturer -- which is up to its hubcaps in debt -- could find itself in an increasingly difficult financial situation if it doesn't swiftly merge with Volkswagen.

In fairytales, a fairy occasionally appears when the going gets really rough. The hero makes three wishes, extricates himself from various predicaments, and can look forward to eternal happiness.
In the harrowing tale currently embroiling Porsche, the good fairy is played by a sheik. Porsche managers say the company is conducting promising negotiations with the emirate of Qatar.

An investor could buy a stake in Porsche or help the carmaker, which is strapped for cash, by acquiring its troublesome Volkswagen stock options. In any case, he would give Porsche a cash injection worth billions and rid the company of all its problems.

But, for the time being, that is just a fairytale. No sovereign wealth fund that intends to safely invest its money is likely to be interested in buying a stake in Porsche or VW. Both companies appear to be in a totally chaotic state. Merger negotiations have been broken off, then resumed. The shareholder families Porsche and Piëch are at each other's throats. Uwe Hück, a member of the Porsche works council that represents employees' interests inside the company, has called on the workforce to demonstrate against co-owner Ferdinand Piëch. And Piëch wants to sack Porsche CEO Wendelin Wiedeking.
But all backroom squabbling aside, the real problem is that Porsche needs fresh capital, or the automaker could become a total loss. "There still remains a risk of insolvency," says a VW manager. Porsche CEO Wiedeking told the supervisory board of Porsche Automobil Holding SE: The "critical situation" will continue even after an extension is granted on the €10 billion ($14 billion) in loans. And co-owner Piëch says: "None of the shareholders wants to see an insolvency."

The fact that Piëch even uses the word "insolvency" is an indication of the seriousness of the situation. But in its official statements, the company vehemently denies any such insinuations. "We certainly haven't lost our shirts," says a company spokesman. He added that Porsche is making interest payments from its ongoing business activities, and the workforce has received its union-negotiated pay increase on time, in contrast to other carmakers. Porsche will only have to seek new financing to the tune of €3.3 billion in March of next year, he said. But that's only part of the truth. Actually, on top of this €3.3 billion, the Stuttgart-based company will very soon need additional loans of over €2.5 billion. So far they have only been able to secure €750 million of that amount.
Out of desperation, Porsche managers have even looked into the possibility of securing loans from Germany's state-owned development bank, KfW. Their application has been turned down, at least for the time being. Now the governor of Baden-Württemberg where Porsche is based, Günther Oettinger, has raised the possibility of his state granting loan guarantees.

Porsche CEO Wiedeking, a turbo capitalist who used to look down his nose at subsidies ("luxury and government handouts don't match"), Porsche CEO Wiedeking has long looked down his nose at government subsidies. Now, though, it seems unlikely that he would turn down such handouts. There are apparently no private banks in sight that are willing to grant Porsche a line of credit without government loan guarantees. And that's not all. During the three days from March 22 to 24, according to the statements of a number of those present, Porsche had to ward off an impending bankruptcy. Even German Chancellor Angela Merkel intervened on the company's behalf.

A Porsche spokesman says that bankruptcy was never an issue. But the events were dramatic.



Part 2: Merkel Lobbies for Porsche Help


It began on Sunday, March 22, at 5:00 p.m. with a crisis meeting in the state chancellery in Hanover. Porsche CEO Wiedeking and his chief financial officer Holger Härter told Lower Saxony's governor Christian Wulff how serious the situation was at Porsche.
The banks were hesitant to provide an extension on a €10 billion loan that was due to be paid back on March 24. The Porsche executives didn't say that they were on the verge of bankruptcy. But that is how a number of those present interpreted the situation.
A number of rescue plans were debated, including VW taking over the automotive business of Porsche AG. The meeting ended at 10 p.m.
Governor Wulff discussed the situation with the chancellor. Both of them wanted to use their contacts with the banks to help the luxury sports car manufacturer raise money.

The next day, Porsche CEO Wiedeking and CFO Härter negotiated possible loans with a number of financial institutions in Frankfurt. Meanwhile, this time a larger group of people met in Wulff's state chancellery.
Porsche co-owners Wolfgang and Oliver Porsche had traveled to Hanover to attend the meeting. Also present were the chairman's committee of the VW supervisory board with VW works council head Bernd Osterloh, former IG-Metall union leader Jürgen Peters, governor Wulff and Ferdinand Piëch. VW CEO Martin Winterkorn and VW CFO Hans Dieter Pötsch also sat in Wulff's office, which is the size of a volleyball court.
Wolfgang Porsche was shocked and speechless as he followed the discussion. He had no idea that Porsche was in such dire straits. VW CFO Pötsch received regular updates on his mobile phone on the ongoing banking negotiations in Frankfurt. The situation changed continuously, with some banks bailing out for good, while others increased their loan commitments.

It gradually became clear that the lobbying work done by Wulff and Merkel had paid off. Commerzbank, in which the German government has a 25 percent interest, raised its line of credit from €365 million to €1 billion. The Bavarian state bank BayernLB increased its participation from €325 million to €500 million, and the Landesbank Baden-Württemberg even raised its loan from €325 million to €2 billion. But all that wasn't enough.
The chairman's committee of the VW supervisory board -- gathered in Wulff's state chancellery -- approved €700 million in bridge financing, granted by VW to Porsche. The Porsche and Piëch families had to put up parts of their car dealership company in Salzburg, Austria as collateral.
On March 24, Porsche CFO Härter also had to negotiate additional loans. It wasn't until 11:00 p.m., one hour before the expiration of the old loans, that Porsche had managed to refinance its €10 billion loan. This is what the carmaker officially announced. The company made no mention of the crisis meetings.

Porsche executives gave the impression that they needed the loans to acquire additional VW shares. But in reality the money primarily served to pay off debts incurred from the purchase of VW shares. Porsche also failed to disclose that some of the banks involved had also taken this opportunity to reduce Porsche's short-term operating credit, which is used to finance ongoing business expenses, such as paying suppliers' invoices. And the interim loan from VW of over €700 million was treated as if it were top secret material.
This last loan reveals just how close a call this was for Porsche. And it illustrates a grotesque situation. Ironically, it was VW -- the very company that Porsche CEO Wiedeking had attempted to dominate with a control agreement -- that saved him. Ironically, it was governor Wulff and VW works council head Osterloh -- men whose influence at VW Wiedeking wanted to reduce -- who helped the Porsche CEO out of this tight spot.

The two men had good reasons not to let Porsche slide into bankruptcy. An insolvency could have grave consequences for VW as well. Porsche has a 50.8 percent stake in the company. If the sports car manufacturer were to fail, these shares could be swiftly sold to a Chinese automotive company, or perhaps even a buyout firm.

But Porsche can only expect a limited amount of help from VW. The bridge financing expires in September. Then Porsche will have to find a new source of financing. And an even more dramatic deadline is looming on the immediate horizon: June 19 is triple witching hour. That's what brokers call the third Friday in the months of March, June, September and December. This is the day when futures and options on stocks and indexes expire. As a safe hedge for Porsche's options, many banks hold VW shares -- a total of 20 percent of the common shares. When the options mature, the banks may unload their VW shares. The price of VW stock would plummet. Porsche would lose billions in depreciation on the VW shares that it still holds.
Triple witching hour is another reason why the negotiations over a possible merger between VW and Porsche, or the purchase of Porsche AG by VW, should be completed by June 3. Instead of waiting in dread until the last day, the companies should leave themselves some breathing room until June 19.
It remains to be seen how the two companies will merge. Porsche perhaps only has a future as one of the 10 brands in the VW family. But VW cannot absorb the small former attacker without first knowing the risks that are hidden in its balance sheets. Up until now, Wiedeking and Härter have refused to disclose all the details of their stock option contracts worth billions.

Wiedeking has been dealt a lousy hand, though. VW CEO Winterkorn says: "We're not under pressure." By contrast, Porsche is in deep trouble, even if CEO Wiedeking tends to gloss over the harsh realities of the situation and still dreams of a "merger of equals" with VW.
These will most likely be his last negotiations as company CEO. Even members of the Porsche family clan are no longer on good terms with him. They are deeply disappointed that Wiedeking neglected the company's finances.

Since the collapse of the Lehman Brothers investment bank in September, 2008, companies around the world have had problems acquiring credit. Yet at the supervisory board meeting of Porsche Automobil Holding SE, on March 30, 2009, Wiedeking said that "up until a week before March 24," when the €10 billion in loans were due, he was "not aware of the worsening credit situation." He also said that he didn't find out about the banks' draconian conditions for the new contracts until after he started taking part in the negotiations himself. It's an embarrassing admission. The members of the supervisory board have great respect for the fact that Wiedeking saved the company from bankruptcy in 1993, reorganized it, and transformed it into the most profitable carmaker in the world. But that won't save his job.

Unless a fairy comes to his rescue. Or a sheik.


Source: spiegel.de

 

[EnI]

Porsche's answer:

Porsche fights off bankruptcy talk

17 hours ago

FRANKFURT (AFP) — German luxury sportscar maker Porsche sought to deflect talk of bankruptcy on Monday after acknowledging it had borrowed hundreds of millions of euros from Volkswagen and needed billions more.

A spokesman for Porsche confirmed a report in Der Spiegel magazine that it had secured a loan of 700 million euros (980 million dollars) from VW, in which it holds a 51 percent stake.

"The loan expires at the end of September," the spokesman said without giving further details.
"Porsche is not on the verge of bankruptcy," he added.
Porsche asked for the loan in March, Spiegel said, as the company struggles to raise cash to finance the huge mountain of debt it undertook when bidding to take over the much larger VW.
At the time, Porsche needed to raise 12.5 billion euros. The spokesman said it has got 10 billion from the banks, leaving it needing around 1.75 billion after the 700 million from VW is taken into account.

"We are still lacking 1.75 billion (euros). We are negotiating with several banks, including the KfW (state development bank)," said the spokesman.
Porsche has found itself facing debts of nine billion euros during its ambitious takeover bid for VW -- Europe's biggest carmaker.

After the bid failed, the two auto giants agreed on May 6 to begin merger talks, giving themselves four weeks to agree a tie-up but negotiations have since foundered amid clashes between the bosses of the two firms.
Shares in Porsche plunged over six percent on the German stock market before recovering in late trade on Monday.

 

[EnI]

Geez ... Porssche Automobil Hodling SE is so much in trouble ... needing billions of Euros to pay-off / refinance the debt. Ouch!

This story has no end at all ... €10+ billions is a HUGE amount.

And this credit crunch is still no near the end. So, Porsche & VW managers & owners will have to put ALL thier efforts into securing new loans every few months. No need to say that's a waste of humane resources - since they will be dealing with financial issues instead of car business. Remember the BMW-Rover situation - when BMW only dealt with Rover, and completely neglecting BMW R&D - resulting in poor outcoms in 2001-2003 cars (especially E65 7er).


Not a very good times for German automakers ... Foreign investors (especially from Russia, China & Arab countries) are already in a predatory position. Waiting for the right moment. To attack the prey. Daimler, Opel, Porsche/VW and even BMW. Troubled German mice - exposed to foreign predatory birds.

 

[CarGuy]

Wow I can't believe we missed this. There was some article I saw not so long ago where Porsche wanted to merge with VW to be saved from this I guess.

 

[gnx]

More to the point

Porsche?s $24 Billion Options Gain at Risk in VW Bid (Update1) - Bloomberg.com

 

[Centurion]

They can always raise funds by selling some of their VW shares which they are obviously very reluctant to do.

 

[klier]

The newspaper I read today (MUCH, much, much more reliable than Spiegel) says Porsche has never had problems with paying the bills. It's only the media saying this stuff.

 

[EnI]

They can always raise funds by selling some of their VW shares which they are obviously very reluctant to do.

That would be a suicide for Porsche/Piech family. With such move they could compromise both VW & Porsche - both being much more vulnerable. Especially Porsche - which desperately needs VAG.

Unless - of course - they found a friendly investor. Eg. some sheik / emir from ME.

Not to mention they are not able to collect money to cash in the options on VAG.

The newspaper I read today (MUCH, much, much more reliable than Spiegel) says Porsche has never had problems with paying the bills. It's only the media saying this stuff.

They have no problem with liquidity at all. Car business is doing quite fine - for this striving situation.
But in the case of not finding ways to refinance the debt they could become insolvent - since banks would wanted the cash back - and the only way to do that would be Porsche scarifying cash reserves: meaning liquidity would become a problem, and there would still be some debt to pay off ... meaning the company would become insolvent, and thus open for bankruptcy.

The line is very thin.

Many financial holdings around the world are on the edge of bankruptcy right now - since their assets are almost worthless compared to the years ago, cash-flow is stopped, and the debts are pilling up ... and the pay-off days are coming closer.

Credit crunch is a big problem for many.




*****

In the end Porsche will end up being "just another" brand in Volkswagen AG portfolio ... While Porsche/Piech family will be forced to invite foreign & domestic investors to invest in Porsche Automobil Holding - meaning the company wont be a family business anymore. I can see Lower Saxony excahnging share in VAG for a share in PAH. And some Arab investors also giving much needed cash for new shares (like in Daimler case). Meaning the P/P family will lose a control in the company - since I'm not sure investors will still stay calm after this fiasco. IMO many of them will demand voting rights.

 

[coolraoul]

Basically they wanted to gain control over VAG, increasing to total control to access VW's funds, which would be used to finance the debts Porsche contracted. So VW's own money would've paid its own takeover.

(The German gov thinks Fiat wants the same: As the Germans will lend lots of money to Opel, Fiat would be taking Opel over only to access this money...)

With failing to reach the 75% ( total control) + Lower-Saxony still having veto rights, Porsche can't touch VW's money and thus can't pay his debts (for the 51% stake in VW).

Once the credits are to be paid back, Porsche doesn't have the cash.
They can't sell VW stakes (the price would fall big time, and they would loose insane amounts of money), which could lead to a takeover of VW by another investor... It's not an option.

Needless to say that the banks may have taken guarantees over a sustainable amount of these shares against their lends, making a part of these shares impossible to sell to raise cash.

Porsche need cash. Otherwise, the will go bankrupt because of excessive debts they can't reimburse, despite the owning of VW shares.

The way things are going, VW could have to take Porsche over. Acquiring an enormous mountain of debts. Because they can't let Porsche go bakrupt with 51% of their shares! They'd be sold at small prices...

It would be like VW acquiring 51% of its own shares with cash usually dedicated to its automotive activities: financially stupid. They would have to sell these shares, gradually to avoid price droppings, and undergoing the risk of an hostile takeover...

The situation is very very problematic for bots carmakers.

 

[EnI]

Yes, a merger is the only option now. But under what conditions? IMO it's not a good time to excercise ego power ... neither for F. Piesch nor for W. Porsche. They are both in deep mud.

I'm sure merged PAH/VAG will be forced to either let some foreign investors into the company, or to sell off some brands - Lamborghini, Bugatti & Seat being the most possible victims.

Either way ... the result will be the following: Porsche CEO & CFO will be fired fore sure. Winterkorn will take over the merged company. Porsche/Piech family won't have the only word in the company anymore.

 

[EnI]

Porsche Running Out Of Options


Lionel Laurent and Parmy Olson, 05.26.09, 06:30 AM EDT, Forbes.com


The luxury carmaker just got a loan from Volkswagen, but crunch time is approaching

LONDON - Porsche and Volkswagen may both be in financial difficulty, but large debts and hard-to-sell options mean Porsche is having the toughest time of the two. Shares in the German luxury car maker slid on Tuesday after the company confirmed it had secured a loan of 700 million euros ($972.5 million) from VW, the carmaker of which it owns a 51% stake.
Porsche denied reports that it was on the verge of bankruptcy as it struggled under the weight of huge debts it incurred through increasing its stake in Volkswagen. On top of the loan from Volkswagen ( VLKAY - news - people ), Porsche is reportedly now in talks with banks to raise another 1.75 billion euros ($243.2 billion) in financing. "We are still lacking 1.75 billion euros. We are negotiating with several banks, including the KfW [state development bank]," a Porsche spokesman told AFP.

Shares of Porsche ( PSEPF - news - people ) fell 4.3%, or 1.88 euros ($2.61), 41.88 euros ($58.17), during midday trading in Frankfurt. Volkswagen's ordinary shares slipped 1.9%, or 4.25 euros ($5.90), to 218.32 euros ($303.26). Porsche managed to refinance 10 billion euros ($13.9 billion) in loans from a large consortium of banks earlier this year, but the carmaker still needed to raise another 2.5 billion ($3.5 billion) more in loans, according to reports.
Porsche's ambitious plan to build up an additional indirect stake of around 25% in Volkswagen, which it revealed late last year, has left the company in a potentially fatal dilemma. Little is known about the terms of the options, but Porsche looks increasingly unable to actually settle them and buy the stake--doing so may cost around 11 billion euros ($15.3 billion), or 150 euros ($208.37) per share, analysts estimate.

At the same time, if the options expire, or banks working in concert with Porsche sell their positions, Volkswagen's share price will likely tumble and hurt Porsche's controlling stake; Equinet analyst Tim Schuldt said that Porsche's 51% holding are the most significant source of profits for the company at the moment.
Porsche may be buying time by hunting out other sources of credit, but analysts see crunch time approaching. No investor, whether from the Middle East, or China, or Russia, is likely to be interested in taking on Porsche's massive option position at the asking price. They'd be paying a much higher multiple for Volkswagen than for, say BMW or Daimler on the open market today, says Sanford C. Bernstein analyst Max Warburton.

And there is a reportedly sizeable open Volkswagen position sitting on the Eurex futures and options exchange, with a mid-June expiry date. Although Porsche says that its options were primarily bought over the counter, this deadline could be linked to banks working on the deal, and could therefore rack up the pressure on the German carmaker.
So how is the saga likely to end? Christian Breitsprecher, of Oppenheim Research, thinks that Porsche will be forced into raising cash via other, potentially painful, avenues. This could involve a rights issue, but also a sale of assets, perhaps even the whole carmaking business, to Volkswagen. This would leave Porsche as a purely financial entity, holding a sizeable--but not controlling stake--in Volkswagen, which has a blocking shareholder in the shape of the state of Lower Saxony. Volkswagen would be the happy owner of Porsche's operations, sending Porsche's dreams of controlling the merged entity crashing to the ground.
Either way, Volkswagen's ordinary shares, boosted by Porsche's hubristic takeover strategy, will likely slide as the buyout premium evaporates. Warburton expects Volkswagen's ordinary shares to plummet to 65 euros. Porsche's stock is likely to fall as well, given the potentially dilutive or operationally damaging road ahead.

Earlier this month cash-rich Volkswagen said it was suspending merger talks with Porsche due to the lack of a constructive atmosphere and apparent annoyance at Porsche's unclear finances. Porsche had been hoping earlier this year to fulfill its need for cash by holding a joint rights issue with Volkswagen -- but that idea was nixed by Volkswagen. Porsche could hold a rights issue by itself, but that would significantly dilute the stakes of the founding Piech and Porsche families.

 

[Centurion]

Basically they wanted to gain control over VAG, increasing to total control to access VW's funds, which would be used to finance the debts Porsche contracted. So VW's own money would've paid its own takeover.

(The German gov thinks Fiat wants the same: As the Germans will lend lots of money to Opel, Fiat would be taking Opel over only to access this money...)

With failing to reach the 75% ( total control) + Lower-Saxony still having veto rights, Porsche can't touch VW's money and thus can't pay his debts (for the 51% stake in VW).

Once the credits are to be paid back, Porsche doesn't have the cash.
They can't sell VW stakes (the price would fall big time, and they would loose insane amounts of money), which could lead to a takeover of VW by another investor... It's not an option.

Needless to say that the banks may have taken guarantees over a sustainable amount of these shares against their lends, making a part of these shares impossible to sell to raise cash.

Porsche need cash. Otherwise, the will go bankrupt because of excessive debts they can't reimburse, despite the owning of VW shares.

The way things are going, VW could have to take Porsche over. Acquiring an enormous mountain of debts. Because they can't let Porsche go bakrupt with 51% of their shares! They'd be sold at small prices...

It would be like VW acquiring 51% of its own shares with cash usually dedicated to its automotive activities: financially stupid. They would have to sell these shares, gradually to avoid price droppings, and undergoing the risk of an hostile takeover...

The situation is very very problematic for bots carmakers.

That's one hell of a devilish plan Porsche has cooked up but had sadly backfired. The Porsche and Pierch need to realise that their organisational and ownership model isn't applicable to an anaconda trying to shallow a hippo. A corporation can only become to big before going public is necessary for expansion or even survival. Money doesn't grow on threes and can neither be printed using a Siemens printer and they need to relinquish some of their control if they want new money injected into the company. It's very naive in trying to dominate an industry while not wanting to give up any control. Even the Dell brothers and Bill Gates had to sell some shares to venture capitalists in order to expand their dreams.

 

[Human]

VW / Porche & German Auto Industrie.

After reading about the Porche debt problem yesterday I had to share my feelings with you.

We on this forum have our own brands we adore. BUT I am and know you all are german car fans. Each brand contribute to what makes the German Auto industry great at leading all other manufactures on...well everyting from technology to style and class. Pioneers in every respect. We all share a common interest in this German car zone, so to speak. I am a BMW fanatic, but share respect for all the german rivals and enjoy the other german brands and their respective technology etc. I want every one of these brands to keep their unique identity and to lead their respective markets.

Now I am so furios at the people involved at putting VW shares at stake and bringing Porche to near bankruptcy. FIRE them all!! Shame on you!!

I hope that you all feel as strong as I do!?

 

[phaeton]

WOW this has being interesting to watch............

I wonder how it will end ?????????? is the multi Billion Dollar question.

 

[EnI]

Qatar buying 25% stake in Porsche SE


Qatar PM sees Porsche talks outcome in 2-3 weeks


Wed Jun 17, 2009 7:36am EDT
By Dania Saadi and Christiaan Hetzner

DUBAI/FRANKFURT (Reuters) - Qatar expects to reveal the outcome of talks on buying a stake in ailing German sportscar maker Porsche SE (PSHG_p.DE: Quote, Profile, Research, Stock Buzz) in two to three weeks, the country's prime minister said, according to media reports.
"We are still discussing the stake. According to the legal agreement between the two parties, neither of them is allowed to disclose any information about it before it is sealed," the Gulf Times quoted Sheikh Hamad bin Jassem al-Thani as saying.
The talks are centered around the size of the stake, Sheikh Hamad said in remarks carried by the Qatar News Agency.
Porsche SE amassed a 9 billion euro ($12.5 billion) net debt pile in its aborted attempt to acquire 75 percent of Volkswagen AG (VOWG.DE: Quote, Profile, Research, Stock Buzz) votes and had looked to rescue itself by uniting with its cash-rich subsidiary, which is Europe's largest carmaker.
VW has rejected the overtures as long as Porsche's finances are in a shambles.
Most of the family members which own Porsche SE were hoping Qatar could inject billions in fresh capital to bolster their negotiating position with VW, in which Porsche owns just over half the votes.
The families have been examining the sale of a 25 percent stake that would grant the Gulf state a blocking minority.
Ferdinand Piech, a Porsche scion and chairman of Volkswagen who is known to be skeptical about the deal, reportedly prevented a quick preliminary agreement in favor of Qatar during a meeting of Porsche SE's owners on Monday in Austria.
But a Financial Times Deutschland story to this effect was denied by Porsche SE, which called the report a "transparent diversion."

LACKING BASIS
"The family stands united behind talks with an investor. There was no such family meeting at which Ferdinand Piech had prevented an agreement with Qatar to quickly buy a stake in Porsche," it said.
"There is also a consensus within the family that the demand from Wolfsburg (where VW is headquartered) that Qatar must first hold talks with Volkswagen management and labor before buying a stake wholly lacks any basis. Qatar is purely an issue for the controlling families and will only be dealt with by Porsche."
A source close to the clans confirmed the families had met on Monday but declined further comment.
Porsche shares fell as much as 5 percent before paring losses to trade down 1 percent at 45.30 euros by 0922 GMT. VW shares slipped 1.6 percent.
Qatar's interest in Porsche highlights the increasing role of Arab states in German carmakers after Abu Dhabi's state-owned IPIC bought a 9.1 percent stake in Daimler AG (DAIGn.DE: Quote, Profile, Research, Stock Buzz) in March, making it the largest shareholder after Kuwait.
Gulf Arab sovereign wealth funds and investment companies, which suffered losses from investments in companies such as Citigroup (C.N: Quote, Profile, Research, Stock Buzz), are eyeing new ventures as they look for bargains and ways to get returns on their oil income.
Sheikh Hamad said the Qatar Investment Authority made a profit of between $7 billion and $8 billion in the first quarter of 2009, the news agency and local dailies said.
"It is not true that our investments are only in the euro zone. We have some in Asia," the media reported Sheikh Hamad as saying.
Sheikh Hamad also said depreciation in Qatar's overseas assets due to the financial turmoil resulted in a loss of about $4 billion in 2008, media said.
Qatar's fund, which also has stakes in Credit Suisse (CSGN.VX: Quote, Profile, Research, Stock Buzz), also remained a long-term investor in Britain's Barclays (BARC.L: Quote, Profile, Research, Stock Buzz), the prime minister was quoted as saying.
His remarks come after IPIC sold more than 11 percent of Barclays, making $2.5 billion from an investment that helped the British bank through the financial crisis.

 

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C'mon ... Qatar is about to acquire 25% of Porsche Holding, and getting voting rights as well (blocking minority stake).

It's a huge thing, if you ask me. A total disaster for the Porsche / Piech family - who won't be able to play alone anymore.