• Jun 30th 2009 at 4:27PM
  • 13
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]

I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.

    • 1 Second Ago
      • 6 Years Ago
      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.
      • 6 Years Ago
      Isn't that what this blog post is all about?
      • 6 Years Ago
      Is Porsche the Michael Jackson of the automobile industry? Talented, but prone to resting on laurels, and profitable operations but profligate financials.
      • 6 Years Ago
      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.
        • 6 Years Ago
        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.
        • 6 Years Ago
        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.
        • 6 Years Ago
        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.
      • 6 Years Ago
      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.
      • 6 Years Ago

      Don't let VW takeover Porsche! That would be all wrong!
        • 6 Years Ago
        I know!

        Can you imagine the designer of the Beetle designing Porsches?...

        oh, wait.
      • 6 Years Ago
      No one messes with Volkswagens superiority.. Das Auto
      • 6 Years Ago
      This can't possibly be true, only American companies have cash problems, the wonderful media tells us so, and they don't ever lie.
        • 6 Years Ago
        Well Porsche relies heavily on the American market, so it's almost the same
    • Load More Comments
    Share This Photo X