Porsche reportedly talked to Daimler as loan bid is rebuffed

Qatar may take bigger-than-expected stake in maker of the Boxster and Carrera

<DIV id=mainstory>By Simon Kennedy, MarketWatch
LONDON (MarketWatch) -- German authorities are set to deny a request by Porsche for a loan of 1.75 billion euros ($2.43 billion), while the sports-car maker has also talked to rival Daimler about a potential investment, according to published reports.
Porsche has built up about 9 billion euros of debt from its long-running attempt to gain control of Volkswagen .
It needs cash to reduce that burden, but the Financial Times reported Sunday that the German government had informally decided to deny the request after state-owned bank KfW advised against it.
Separately, Manager Magazin reported on its Web site late Friday that Porsche had held talks with Daimler at the end of last month.
The talks revolved around Daimler either buying a direct stake in the maker of the iconic 911 sports car or receiving options for shares in Volkswagen, the report said.
Shares of Porsche fell 1.1% Monday, while Daimler climbed 1.2% in Frankfurt. Volkswagen's shares fell 2.7%.
Porsche has previously said it's in exclusive talks about selling a stake of about 25% to Qatar.
Germany's Focus magazine reported that Qatar could end up acquiring a stake of as much as 29.9%, citing a paper presented by Porsche CEO Wendelin Wiedeking to the Porsche and Piech families.
Commerzbank analyst Daniel Schwarz said a deal with Qatar seems more likely than Daimler, in light of the pressure to find fresh equity and previous comments by Dieter Zetsche, the chief executive of Daimler AG.
"Rumors of interest by Daimler may even serve to accelerate a decision by Qatar," Schwarz said.
"However, despite DaimlerChrysler being a prominent example of failed M&A, we would not deny the industrial logic of such a step given rising technology costs," he added.
Analysts at Oppenheim Research said there would be little logic behind Daimler acquiring a 25% stake in Porsche, because what the sports-car maker really needs is the industrial integration with Volkswagen that began years ago.
"In our view, these press reports only underline the desperate situation of Porsche," said analysts Christian Breitsprecher and Jens Schattner in a note to clients.
"In the end we think that Porsche will have to do a massive rights issue and sell its sports-car business to VW," they added

 

Porsche better get an infusion pretty quick or they'll be forced to drastically slow, suspend, cancel or worse sell certain operations.

I'm sure Ferdinand is rolling over in his grave.

 

That's good news for capitalism. Looks like Porsche will have to give up more if they want to stick around. I sure wish the socialistic administration of the US would have said no to their own. Porsche should have stayed focused on quality and not quanity.

 

I do not get all into politics but I totally agree with you 100% on this.

 

This not about quality or quantity. It's about leverage. Porsche tried to acquire VW, a company many times its size. That required borrowing a lot of money.
That now appears to have been a big mistake.

The end result is likely to be bad for the Porsche owner now and future. There will be even more pressure for Porsche to even more profitable, which will probably mean cheapening the car to facilite higher sales and higher margins.

 

Not if they can't secure the loan.
Does one really need c4, C4S, C4 cab , C4S cab --FOUR models just for an AWD segment ?
The base coupe should have never existed . The S sould have been the coupe for 7K less than what it costs today . In fact we are seeing consumers demanding this and that's why 10 percent discounts are quite common.

Porsche needs to cut production , improve quality, and lower price . If they built a better product they could even shave a year off warranty and find other avenues to hedge costs . In fact the 993 only had a two year warranty. They could also generate profit with more frequent service intervals and a direct cutomer based CPO program to the manufacturer rather than at the dealership level for any car out of warranty which can pass an inspection.

As for GM --I almost wonder if the intervention was more a matter of public safety than anything else . If an entire factory town faces bankrupcy in one immediate dose it may have posed a real problem . In fact one may recall that the GM news broke as the banking sector and stock market were plummeting. What it worth billions to float the GM demise ? Depends Two sides to the coin .

 

Weird

 

Indeed.

Wendelin Wiedeking has been all about one thing from the very beginning $$$. Remember Porsche makes the highest profit per vehicle and has been for years now.

 

Whoa! I really, honestly, did not know that Porsche has such massive debt. I believed they were just going plus plus plus and therefore reinvested in their deutsche cousin ()