Porsche says no
June 27, 2009
"We won't let ourselves be blackmailed," said Porsche chairman Wolfgang Porsche in a statement on Saturday, June 27. "These are not the manners that encourage a spirit of togetherness."
According to industry sources quoted in the German magazine Der Spiegel, Volkswagen and the German state of Lower Saxony, which also owns a portion of Volkswagen, have given Porsche two days to accept the proposal for cross-ownership that would eventually lead to a merger or face bankruptcy.
"Ultimatums never achieve anything," Porsche said, calling on "the initiators" to "calm down and pursue their proposals in closed-door talks, not via headlines."
Failed attempt
Porsche is in a financial bind because it tried to engineer a takeover of Volkswagen in 2008 but failed as the global economic downturn worsened. It currently owns 51 percent of Volkswagen yet it does not have management control.
Volkswagen, the larger of the two, has proposed to take over 49.9 percent of Porsche's factories and brand for 3 to 4 billion euros, with the rest of the shares staying in Porsche's hands.
If Porsche rejects the offer, it will probably see VW demand reimbursement of a 700-million euro loan it provided Porsche in March.
Porsche - currently carrying a heavy burden of 9 billion euros ($13 billion) in debt - prefers a rescue option from the Qatari Investment Authority (QIA) in exchange for a minority stake in the sports car maker.
The Gulf state, however, could either help Porsche to win 75-per-cent control - something that would infuriate the VW workforce - or buy expensive VW stock options and leave Porsche largely powerless.
No help from the government
Lower Saxony, which owns one fifth of Volkswagen, said it would welcome Qatar as a direct shareholder in VW rather than as a part-owner of Porsche's 51-percent stake in VW.
Porsche had earlier this year asked the German government for a credit of 1.75 billion euros but was turned down.
The sports car maker is owned jointly by the Porsche and Piech families. With Ferdinand Piech also being head of the supervisory board of Volkswagen, the ongoing corporate struggle is also a family drama.
Porsche is wholly owned by the descendants of founder Ferdinand Porsche, and while shares are traded on the stock exchange, their owners have no voting rights.
A previous attempt to open the company up to Middle Eastern investors failed. In 1983, Piech's brother Ernst sold his share to Kuwait, but the family immediately objected and bought the stake back, a Porsche spokesman said.
av/dpa/AFP
Editor: Toma Tasovac