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Report says cash-strapped Porsche needs further billions

Report says cash-strapped Porsche needs further billions

Published: 23 May 2009 15:24 GMT+02:00
Updated: 23 May 2009 15:24 GMT+02:00

Ailing sports carmaker Porsche’s financial troubles are much worse than feared and the company needs another cash injection of €2.5 billion, news magazine Der Spiegel reported on Saturday.

The magazine said the Stuttgart-based carmaker teetered on the brink of bankruptcy for three days in March this year before it was rescued by a bridging loan of over €700 million guaranteed by Volkswagen.

The report said that loan guarantee however was only valid for a year. Porsche needs €2.5 billion euros right away to finance its operations, the magazine said, adding the carmaker had only received a fraction of what it needed.

Earlier this week, the German government said it was holding back on state aid to the heavily indebted luxury car maker as it seeks to recover from costly efforts to acquire its rival Volkswagen.

"It was too early to decide" whether to bail out the company which had applied for state aid, an economy ministry spokesman told AFP after Porsche's request was examined on Wednesday evening.

German daily Handelsblatt reported on its website that Porsche had requested at least €100 million from a government stimulus fund that provides guarantees or credits to firms struggling in the crisis.

Porsche has debts of €9 billion after it bought a 51 percent stake in Volkswagen (VW) and is having trouble getting more loans. It was forced to abandon its plan to take over VW and said the two planned to merge instead.

AFP/The Local (news@thelocal.de)

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