Porsche loan request rejected by Germany's state bank
Porsche is profitable and it owns a big chunk of the far larger Volkswagen, yet cash seems to be in short supply. Automotive News is reporting that the world-renowned luxury sports car maker's 1.75 billion euro ($2.45 billion USD) loan request from German state bank KFW has been rejected, leaving Porsche to search elsewhere for funding. Porsche secured 10.75 billion euros ($15.1B) in financing from banks in March to feed its 9 billion euro debt ($12.6B) mountain, but it's looking for alternative means for financing its cash crunch.
Porsche has already looked outside of Europe for funding to handle its mounting debt, as it worked with the Arab emirate of Qatar to secure a sizable stake in the company. VW, smelling blood in the water, reportedly gave Porsche an ultimatum, offering up 3-4 billion euro ($4.2-$5.6B) for 49% of the sports car maker in exchange for not forcing the repayment of a 700 million euro loan ($983M) in September. Porsche responded by saying that ultimatums don't belong in the 21st century. Unfortunately, bankruptcies are all too common in the new economy, so the proud German company may have to dig a bit deeper to keep themselves from falling into the financial abyss.
[Source: Automotive News (subs req'd) | Image: Michael Latz/Getty]
Reader Comments (Page 1 of 1)
BigMcLargeHuge 4:35PM (6/30/2009)
This '21st Century' philosophy that Porsche seems to share with some other automakers(bad credit yet deserving of high-risk loans) hasn't really worked out so well yet either.
Frankly, VW has a more business-like approach... to business. Enough with the favors between executives already, hold someone accountable for bad financial decisions.
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zamafir 5:03PM (6/30/2009)
well the irony of your comment is the bad financial decision was to buy up vw so vw wouldn't fail. It’s just a cluster fudge all around.
why not the LS2LS7? 5:25PM (6/30/2009)
I find the comment telling too. The recipients of ultimatums usually don't like receiving them, Porsche is no exception. They're in a tough spot and they need to try everything to talk their way out of it, including trying to shame others by describing their tactics as a throwback.
audi_arena 6:13PM (6/30/2009)
Zam- Porsche's decision to buy VW had nothing to do with preventing it from failing, and can be chalked up to simple greed that apparently is the culture these days with corporate execs. The majority of Porsche's profits all came from their financial division i.e. hedgefund.
MoonRover 5:01PM (6/30/2009)
This can't possibly be true, only American companies have cash problems, the wonderful media tells us so, and they don't ever lie.
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audi_arena 6:28PM (6/30/2009)
Well Porsche relies heavily on the American market, so it's almost the same
landstrasse 5:02PM (6/30/2009)
our government is not the best at the time, but this decision was right!
I am reliefed, that they dont waste our taxmoney for mistakes made by some
coked up managers. I love Porsche and their cars and hope only the best for
their future, but not in this way.
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N 5:05PM (6/30/2009)
noooooooooooooooooooo!
Don't let VW takeover Porsche! That would be all wrong!
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Greg 6:46PM (6/30/2009)
I know!
Can you imagine the designer of the Beetle designing Porsches?...
oh, wait.
Autblogist! 6:12PM (6/30/2009)
How do you turn one of the slickest financial moves into sh*t, ask Porsche.
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ronnie schreiber 6:12PM (6/30/2009)
Is Porsche the Michael Jackson of the automobile industry? Talented, but prone to resting on laurels, and profitable operations but profligate financials.
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dee ohlsone-taylor 6:30PM (6/30/2009)
No one messes with Volkswagens superiority.. Das Auto
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Amien 6:32PM (6/30/2009)
After all their stunts, if Porsche go under, or something similar, i will seriously LMAO.
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Blackpool 6:47PM (6/30/2009)
I see the shadow of the mafia in the distance. Something tell me that porsche will soon receive money from shady businesses if there are no banks available, even though they will probably run the company more efficiently.
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LloydChiro 12:38PM (7/01/2009)
Isn't that what this blog post is all about?
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