Porsche Loan Seems Unlikely
Be it via loans, a partial sale, or a complete merger with Volkswagen, Porsche has been looking for some sort of financial salvation as of late. That doesn’t seem imminent, as the German government seems set to reject a loan application, and a deal with VW seems unlikely.
On Friday, the first indications surfaced that the state-owned development bank Kreditanstalt für Wiederaufbau (KfW) had recommended against extending Porsche an emergency loan of €1.75 billion ($2.43 billion). “The KfW wants us to improve [our application],” said a Porsche spokesman.
A German business magazine reported that Porsche was in advanced talks to sell a stake to Daimler. However, Porsche said it did not know of any move and Daimler responded with “Everyone talks to everyone in the industry.”
Such a deal seems unlikely, as Daimler would be more interested in partnering with VW strategically. “There is an industrial logic for Daimler to do a deal but in the sense of Volkswagen/Audi and not Porsche directly,” said Björn Voss, an analyst at M.M. Warburg. “VW is, however, already well positioned and would not profit from this (a Porsche-VW deal), so a deal appears unlikely.”
In an interview with Reuters, Hans Dieter Pötsch, VW’s finance chief, casts doubt on whether Porsche and VW were on track to reach a deal. Porsche currently holds a 51 percent stake in VW, and wants the German giant to merge, creating a gigantic auto group with ten brands. Porsche is also currently in talks with Qatar about selling a stake to the Gulf state.
Sal. Oppenheim, a European banking group, advised clients that “[as] a loan from the KfW government bank is becoming increasingly unlikely, the search for new funds seems to be getting almost ‘desperate.’ In the end we think that Porsche will have to do a massive rights issue and sell its sports car business to VW.”
Although the recommendation of KfW’s internal loan committee is not the final word on a state loan (the German government could still issue aid), the German sports-carmakers chance at getting a loan has severely diminished.
Source: Automotive News Europe