View Full Version : Porsche gets loan from VW, asks for more to stave off bankruptcy

The Tony Show
05-26-09, 08:20 PM
First you have Reuters getting confirmation that VW (which Porsche was just trying to buy) has loaned Porsche $1 billion dollars to cover outstanding debts. That's odd.

Porsche (PSHG_p.DE (http://www.reuters.com/finance/stocks/overview?symbol=PSHG_p.DE)) confirmed on Monday it got a 700 million euro ($980 million) loan from its Volkswagen (VOWG.DE (http://www.reuters.com/finance/stocks/overview?symbol=VOWG.DE)) unit but insisted it could cope with its debt woes.
"Porsche is not on the verge of insolvency even if that is alleged over and over," a company spokesman said, referring to media reports about the German group whose brash takeover of VW has stalled, forcing it instead to seek a merger with VW.

Volkswagen had said at the weekend it loaned the money to its biggest shareholder, adding a bizarre twist to Porsche's aborted effort to take full control of Europe's largest automaker.

It gets even stranger when you read reports published in The Telegraph that the loans from VW were taken out as long ago as March, and that Porsche is now also seeking $1.3 billion from the Bank of Tokyo.

Porsche's shares fell 3.1pc in Frankfurt on Monday after it emerged that the company had obtained a €700bn loan from Volkswagen as long ago as March. A Porsche spokesman said the group is negotiating bridging finance with a variety of banks, including the state lender KfW.

It is understood that Porsche is also in talks with the Bank of Tokyo for a €750m loan, and is seeking help from the regional government of Baden-Wurttemberg.


05-26-09, 09:07 PM
Wait.....Porsche is getting a loan from VW.....I was thinking that a month ago I read an article that said that Porsche was now the majority owner of VW due to a very lucrative stock derivatives buy that the Porsche CEO and CFO executed over the past couple years. Can't remember where I read the article, might have been Fortune Mag but I do remember that they made more (like over a billion dollars) on the stock trading scenario than Porsche had in gross car sales.....something like 100 million profit on cars and 1.3 billion profit on stocks.

Something seems awfully strange here.....

05-26-09, 11:13 PM
Porsche went deeply in debt to try to do a leveraged buy out to take control of Volkswagen. The regional governents that also have a significant say as to how this deal will go done have caused considerable regulatory delay. Porsche's cash is not sufficient to cover the debt service on the loans they took out to do the hostile takeover therefore they are being force to seek bankruptcy leaving Porsche's management with egg all over their face. Ferdinand Piech CEO of VW is very pleased with his foiling the coup.