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Porsche nearing sale of 25% stake to Qatar?
After a few years of financial windfalls, Porsche is suddenly in need of plenty of capital. The German automaker already received a 700 million euro ($978 million U.S.) bridge loan from Volkswagen in March to stay out of bankruptcy, and it is reportedly in talks with banks to secure 1.75 billion euros ($2.42 billion U.S.) in financing.
Bloomberg is reporting that Porsche could also be looking for as much as 2.5 billion euros ($3.45 billion U.S.) from the Arab emirate of Qatar to remain independent of the much larger VW. Bloomberg quotes two anonymous sources as saying that the Middle Eastern country is looking for at least a 25% stake in the storied luxury sports car maker. The fresh funding would help Porsche alleviate some of its 9 billion euro ($12.5 billion U.S.) debt, while also giving the Stuttgart automaker some breathing room to stave off future financial meltdowns.
Last week, Automotive News Europe was reporting that Qatar was exploring two options: it could either buy a stake in Porsche Automobil Holding SE (which owns both Porsche's automaking unit and its 51% stake in VW), or purchase Porsche's outstanding options on a 24% stake in Volkswagen. According to the Bloomberg sources, a deal between Porsche and Qatar could be consummated by the end of June.
[Source: Bloomberg | Image: Michael Latz/AFP/Getty]
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Reader Comments (Page 1 of 1)
katshot 1:48PM (6/16/2009)
Am I the only one confused about the VW/Porsche relationship? I was always under the impression that Porsche was part of, or owned by VW. Lately, the talk of Porsche buying a controlling stake in VW had me totally confused. Now, it mentions here about how Porsche had to take a huge loan from VW to keep out of bankruptcy?
This whole thing makes no sense to me.
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audi_arena 3:51PM (6/16/2009)
Essentially, Porsche became the most profitable dealership in the world over the past decade in a half only partly due to a well run company and good product. The majority of thier income was made on- you guessed it- good ol' Wall St. And much like Wall St. guys, they thought that after few good trades thier luck would never end and attempted to buy out VW.
I have a hunch that the sudden cashflow problems are a direct result of how heavily they were invested in wall street.
sparrk 4:18PM (6/16/2009)
it has a high risk undertaking , Porsche got a loan , started byuing into VW and hoped the "VW law" will fall fast enough for they to get VW and make a quick profit, then the financial crisis hit. now they need cash to stay independent so that VW doesn't swallow Porsche.
TheCleaner 2:14PM (6/16/2009)
yeah im not to sure either.. if you have a 51% equity stake in a company, why would you need to loan from the company you control... maybe i just dont know enough about finance..
but if i was looking at places to invest 2.5 bill.. it wouldnt be in the 'verging bankrupt' porsche, but investing in VW, driving porsches controlling stake out. Clearly VW, or VAG in general, is profitable if its able to 'give' loans
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BigMcLargeHuge 2:29PM (6/16/2009)
VW has the ability because they are large, have good credit, and probably liquid assets as well.
VW can't really lose on that deal, because if Porsche can't pay back the loan, VW might be able to demand some of their stock back.
Porsche, on the other hand, is really doing some odd things to secure their VW stock.
Seems Porsche is trying to diversify ASAP. They are putting ownership in VW over ownership in themselves....
maybe they don't like where they stand looking into the future without some fuel-efficient cars on the road, and can't see the sportscar market growing in the foreseeable future.
Flea 2:21PM (6/16/2009)
first they sell their soul to the devil (Cayenne, Panamera), now they're selling themselves to some sheikh. Respect, Porsche...........NOT.
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Whitey 7:36PM (6/16/2009)
I agree, Porsche has to be one of my fav manufaturers, i have always loved Porsche, but i lots a lotta respect for them when they made the SUV, i can live with the Panamera just cuz it looks 911-ish....but the Cayenne is disaster, time to find a new fav perhaps....any suggestions...koenigsegg...zonda...hmmm not a lotta good out there....
sparrk 8:01PM (6/16/2009)
the Cayenne allowed Porsche to remain independent.
Richard S. 2:51PM (6/16/2009)
I don't understand the sudden change in finances at Porsche. Weren't they not long ago making a killing on their call options on Volkswagen that drove VW shares to absurd value and led to losses to many hedge-funds short VW?
Couldn't they have sold some of their options and lock in the huge profits (then).
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William 8:47PM (6/16/2009)
The banks have already said no to the 1.75 billion euro loan. Currently the "bank" in question is KfW, i.e. the German government. In fact one of the latest "normal" bank loans was 700 million from a Japanese bank, as the normal bank loan avenues were already shut.
The reason behind this (and the problems at Mercedes and BMW) is the Germans using the 1998 agreement to reduce emissions as toilet paper. The Italians and French actually respected their agreement, already complying a year early in 2007. The Germans did absolutely nothing, despite having HUGE margins on their vehicles, and enormous pools of money for research. Not only have German lobbyists blocked European laws for cleaner emissions in Bruxelles on several occasions already (watering down the proposals and pushing them back in time) but now they are heavily distorting competition in Europe, and not just in the automotive sector. PSA and Ford have, and reasonably so, complained to Bruxelles about the 1.5 billion loan to Opel from the German government, which may also fork out another 1.75 billion for Opel, while BMW is also asking about loans.
Not only have the Germans been extremely dishonest about emissions, but now they are passing on the bill to Europe. I hope Europeans are understanding now just how costly it is to have Germany in the EU. Then there is the cherry on the cake: Germany selecting for Opel a Canadian-Russian deal over a European deal (piiting a parts maker and oligarch against a carmaker)!
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William 8:49PM (6/16/2009)
oops... 1.75 for Porsche
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