Thursday 4th June 2009

Porsche Asks For 1.75bn Euro Loan

Sports car maker goes cap-in-hand to state-owned German bank

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Porsche's chase of VW has left big debts

Porsche, which is struggling to refinance the huge debts it has built up as part of its takeover attempt of VW, has asked for a 1.75 billion euro (£1.5bn) loan from state-owned German bank KfW.

Porsche failed to raise the full 12.5 billion euros of credit it needed to refinance its debts back in March, managing to secure just 10 billion euros.

Since then Porsche has been undertaking the big-business equivalent of searching looking down the back of the sofa for loose change. So far it has managed to find 700 million euros from VW, and the 1.75 billion euros from KfW will make up the bulk of the rest of the shortfall.

Don't think that Porsche is pushing for a GM or Chrysler-style government handout, however; Porsche says it intends to repay the loan at commercial interest rates.

The application is politically sensitive, as the loan money would come from a 40 billion euro KfW fund earmarked for corporate financing as part of the German government's economic stimulus programme - and that has a 300 million euro limit.

Porsche's costly takeover attempt of VW has now stalled and, though it owns 51 per cent of VW, a merger is now more likely than a takeover.

[Mat Hammond]

It's unreal that the company has gone from top profits/trading position to having to ask for cash from the State.

Very worrying....


http://www.ft.com/cms/s/0/8d289224-509f-11de-9530-...

Edited by Mat Hammond on Thursday 4th June 12:20

[krisles]

Thats what happens if the cookie is to big to swallow - greed. I hope they don't choke to death.

[sprinter1050]

"Funny" finance for a company allegedly involved in "funny" money share dealings that threw Hedge Fund types into turmoil is it not ?

What goes around comes around.

[Fiatfan]

And will the boss of Porsche who is reported to be such a business genius (with a salary to match) pay any cost for this mistake?

[Frimley111R]

Most of the story is in this week's Autocar. Worth a read.

[nsmith1180]

Like hell will he!

He will get a big payoff and told to stand down at the worst. More likly he will keep his job. Would be funny if the Govt made them sell off a stake in VW to clear the debts tho!

[flowman]

Problem is , who would buy VW shares even if they were forced to sell, and at what price?

[nsmith1180]

Who cares?

Sorry, I have a deep seated hatred of the VW Audi Group.

[Fittster]

What interest rate would be charged on the load?

[asbo]

nsmith1180 said:

Who cares?

Sorry, I have a deep seated hatred of the VW Audi Group.

That's nice. Do you know, I like nothing better than a nice warm bath when it's cold outside.

[E21_Ross]

nsmith1180 said:

Who cares?

Sorry, I have a deep seated hatred of the VW Audi Group.

why? they do make some good cars

[Fume troll]

That will be the source for this story then - http://www.pistonheads.com/gassing/topic.asp?h=0&a...

over optimistic sales forecast to "prove" they are viable.

Cheers,

FT.

[Ditch]

Now my economic knowledge isn't great, but if you'd asked me a few weeks ago 'Which car manufacturer will most easily weather the credit crunch?' I would have answered 'Porsche'.

Very surprising.

[rejn]

Ditch said:

Now my economic knowledge isn't great, but if you'd asked me a few weeks ago 'Which car manufacturer will most easily weather the credit crunch?' I would have answered 'Porsche'.

they would have been fine if they hadn't tried to buy VW - seems their ambitions just got a bit too big.

[morgrp]

nsmith1180 said:

Who cares?

Sorry, I have a deep seated hatred of the VW Audi Group.

I'd sooner drive a VW than one of your "beloved Vauxhalls or Nissans"

[drumm23]

Like most people involved in the hedge fund industry, my first reaction is a rather loud "HA-HA" followed by a LOL.

[SystemParanoia]

people like traders less than car companies though.

its traders causing the price of oil to keep rising.

sod all of em i say

[posterboy]

asbo said:

nsmith1180 said:

Who cares?

Sorry, I have a deep seated hatred of the VW Audi Group.

That's nice. Do you know, I like nothing better than a nice warm bath when it's cold outside.

morgrp said:

nsmith1180 said:

Who cares?

Sorry, I have a deep seated hatred of the VW Audi Group.

I'd sooner drive a VW than one of your "beloved Vauxhalls or Nissans"

[drumm23]

SystemParanoia said:

people like traders less than car companies though.

its traders causing the price of oil to keep rising.

True, but to be fair, Porsche have often boasted of their proficiency at the trading game; they decided to swim with the piranhas.

Edited by drumm23 on Thursday 4th June 14:44

[adycav]

Bah, they'll be alright once they start selling fully specced (and rather vulgar) Panameras to the Russians and Chinese.