| Wednesday April 16th 2014

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Germany to Porsche: No bailout for you!


Porsche 911 GT2

Porsche Automobil Holding SE, the company that owns Porsche AG and has sought a controlling interest in Volkswagen AG, will not be on the list of government loans in Germany this year according to the latest reports. Porsche is already actively seeking help from outside sources, however.

Porsche had sought a $2.45 billion loan from Germany’s state bank KFW, but the bank rejected the loan on Tuesday, reports Reuters.

Earlier this week Porsche rejected an offer from Volkswagen in favor of a deal still under discussion with Qatar’s state-owned Qatar Investment Authority. The end goal, whatever the source of funds, is to find a way to service the roughly $12.5 billion debt the company holds.

The takeover attempt on VW was made to get access to cash, but when Porsche’s share stalled out at just over 50%, that access was still out of reach, so alternate routes were explored.

Porsche’s dramatic saga with Volkswagen has been well-documented – too well, really – and so while this latest development lacks the excitement of an espionage scandal, it’s potentially more important in the long term. Since Porsche now knows it has no safety net, the fight for integration with VW is one of survival as much as expansion.


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