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Porsche reportedly close to deal with VW

AFP
AFP - [email protected]
Porsche reportedly close to deal with VW

Owners of sports carmaker Porsche are close to an agreement which would combine the heavily indebted company with Volkswagen and sell VW stock options to Qatar, according to press reports on Thursday.

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The Porsche and Piech families are "poised to settle their feud" over a bail-out plan under which VW would buy 49 percent of Porsche, Qatar would become the third-biggest shareholder in VW, and Porsche's massive debt would be nearly wiped out, the Financial Times Deutschland reported citing a source close to the families.

"Porsche and VW are getting closer, there are no other solutions," the daily Die Welt added.

Although no firm decisions have been taken yet, both Porsche and VW, Europe's biggest carmaker, have called extraordinary supervisory board meetings on July 23 in the southwestern city of Stuttgart, where Porsche is based.

"We have no knowledge" of any agreement, a Porsche spokesman nonetheless told AFP. "It is better to remain prudent" and wait for the meetings, he added amid a

daily flood of rumours about the company.

The FTD quoted a source as saying that a sale of 49 percent of Porsche to VW for as much as €4 billion ($5.6 billion), a capital increase worth five billion, and the sale of VW stock options could eliminate Porsche's debt of at least €9 billion "as completely as possible."

Qatar could end up with around 20 percent of VW's equity if it acquired and exercised the options, making it the third biggest shareholder behind Porsche, with almost 51 percent, and the German state of Lower Saxony, with just over 20 percent. VW's home of Wolfsburg is located in the northern state.

A deal would probably be followed by a full merger of Porsche and VW, the FTD said. Such an agreement would mean victory for Ferdinand Piech, a major Porsche shareholder and head of VW's supervisory board, and defeat for Porsche chief executive Wendelin Wiedeking, who has fought to keep the company independent.

"Wendelin Wiedeking will in any case present his concept on July 23," the Porsche spokesman stressed.

Wiedeking saved Porsche from going under in the 1990s, but ran up billions in debt since 2005 trying to engineer a takeover of VW.

He has tried to get Qatar to invest directly in Porsche and media reports said the Gulf emirate had proposed a seven-billion-euro deal that included a Porsche stake and the VW stock options.

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