Wednesday 1st July 2009

Porsche Refused State Financial Aid

1.75bn euro loan request denied by German state-owned KFW bank

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Porsche: more financial strife

Porsche no doubt wants people to focus attention on its cars - such as the new Panamera, driven by PH this week - but the company's turbulent financial wranglings continue to make the headlines. Latest in the saga is the news that its recent application for a 1.75bn euro loan from the state-owned KFW bank has been rejected.

The German sports car maker - saddled with 9 billion euros of debt that it is struggling to refinance - announced yesterday (Tuesday) that it was not successful in its application for the KFW loan, and that it would not be lodging any more loan requests with the KFW.

Porsche had already tried and failed to secure the loan from commercial banks before its application for the KFW money.

Instead, Porsche has pledged to secure its desperately needed extra finance by alternative means. Although details were not discussed, this is presumably an allusion to Porsche's recent talks with the state of Qatar about a possible investment from the Emirate, or the possibility of VW purchasing a large stake in Porsche.

Both these ideas have proved controversial, reigniting the infighting among the major shareholders in Porsche as the feuding family members - particularly cousins Ferdinand Piech (VW chairman) and Wolfgang Porsche (chairman of Porsche) - argue over how best to prop up the beleaguered manufacturer.

[wab172uk]

I like VW, and I like Porsche...... But which is best?

There's only one way to find out... FIGHT !!!

[Dakkon]

Looks like Porsche will win:

http://www.googlefight.com/index.php?lang=en_GB&am...

[rockystarr]

This is getting absolutly ridiculus!

[kazino]

Lol that's a good laugh.

Come on Porsche sort it out, enough already

Dakkon said:

Looks like Porsche will win:

http://www.googlefight.com/index.php?lang=en_GB&am...

[andy665]

Porsche management get greedy and borrow vast sums to buy Volkswagen shares - takeover deal goes sour and now saddled with the borrowings now want / need state aid - TOUGH, by state aid we all know it would probably be EU aid, therefore coming out of our pockets

Its like me spending my salary on lottery tickets and then asking the government to pay my bills because I have no money

Edited by andy665 on Wednesday 1st July 12:14

[B10]

It serves them right.

[pagani1]

Oh how the rich enjoy themselves-send for Lord Stokes and Red Robbo.
This is nearly as entertaining as One eyed Jawslack who pretends to know everything in his appalling efforts to manage UK PLC-whereas he couldn't organise a pee up in a toilet, at least the Boche argue about the right way to MAKE MANUFACTURING WORK-do we still have any here of note?
Oh yes and goodbye Dockyards! STOP TRIDENT & INVEST IN ENGLAND JAWSLACK NOT THAT YOU CARE.

[Al 450]

It's a good job they've been saving all that money on development costs for the 911 then.

[spoonoff]

I don't understand- Porsche made a killing by secretly hoovering up all VW shares last year, then all the people who'd short sold them expecting the market value of VW to drop lost a fortune (a few hedge funds went down because of this) when the vlaue rose due to Porsche revealing (which they did not have to do before due to German laws) they were the majority holder.
How have they managed to lose the fortune they made by pulling this off?

[jgt1972]

Al 450 said:

It's a good job they've been saving all that money on development costs for the 911 then.

[E21_Ross]

jgt1972 said:

Al 450 said:

It's a good job they've been saving all that money on development costs for the 911 then.

surely you mean just design development? i'm willing to bet in the bits which make the driving experience better/make it faster etc etc department they won't be saving a lot of money...

[StevenJJ]

This was up in lights before any of it went 'bad' (Scania trucks anyone). There's just too much of this (globally) to 'bailout'.

Bring on hyperinflation.

[rockystarr]

Some of these firms just need to simply just die, we can't just keep on bailing them out. Harsh but true.

[Mr Whippy]

Why don't they just sell the VW shares?

I thought Porsche were very profitable?

[Frimley111R]

NINE BILLION EUROS FOR DEBT!!!!!

[louiebaby]

Mr Whippy said:

Why don't they just sell the VW shares?

I thought Porsche were very profitable?

To whom will they sell them?

[davemac250]

spoonoff said:

I don't understand- Porsche made a killing by secretly hoovering up all VW shares last year, then all the people who'd short sold them expecting the market value of VW to drop lost a fortune (a few hedge funds went down because of this) when the vlaue rose due to Porsche revealing (which they did not have to do before due to German laws) they were the majority holder.
How have they managed to lose the fortune they made by pulling this off?

Because they never had the money in the first place and had taken options on for the shares that they simply cannot service.

Now that the VW/Porsche scenario is in the open none of the financial institutions will be interested in buying into the shares again.

They have made their bed, they should be made to lie in it.

[Escort Si-130]

The idiots at Porsche were too greedy to buy VW, they bite off far more than they can chew. They seem reluctant to sell Porsche back to VW either. To me it seems the only sensible option is to sell Porsche cars company to VW.

[Mr Whippy]

louiebaby said:

Mr Whippy said:

Why don't they just sell the VW shares?

I thought Porsche were very profitable?

To whom will they sell them?

Dunno.

Just as likely to be able to sell something to raise some cash, rather than just borrow cash against the shares in the first place!?

[flemke]

davemac250 said:

spoonoff said:

I don't understand- Porsche made a killing by secretly hoovering up all VW shares last year, then all the people who'd short sold them expecting the market value of VW to drop lost a fortune (a few hedge funds went down because of this) when the vlaue rose due to Porsche revealing (which they did not have to do before due to German laws) they were the majority holder.
How have they managed to lose the fortune they made by pulling this off?

Because they never had the money in the first place and had taken options on for the shares that they simply cannot service.

Now that the VW/Porsche scenario is in the open none of the financial institutions will be interested in buying into the shares again.

They have made their bed, they should be made to lie in it.

It's not that they couldn't sell the shares. They easily could, but only after most of the present uncertainties had been resolved, and at a lower price than the market. By doing that, they could incur a large loss that would bring about further problems.