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June 8, 2009 9:24 pm
Porsche is in advanced talks about selling a large stake to the Gulf state of Qatar that could ease the sports car maker’s financial pain and turn the tables in its feud with Volkswagen.
Wendelin Wiedeking, Porsche’s chief executive, is talking to the Qatar Investment Authority (QIA) about taking a stake of up to 25 per cent in its holding company, people familiar with the talks said.
They said QIA was examining Porsche’s books and a deal could be announced within weeks.
A possible investment by the Middle East fund would considerably strengthen Porsche’s clout in its merger talks with Volkswagen, potentially putting the sports carmaker back in control in the saga surrounding Europe’s largest carmaker.
It would also call into question the ambitions of Ferdinand Piëch, Volkswagen’s chairman and a large Porsche shareholder, to stay at the helm of a combined group.
The feuding Piëch and Porsche families last month agreed in principle to merge the two carmakers and make Porsche the tenth marque in a group that includes VW, Audi and Bentley.
The agreement came after Porsche had to suspend its attempt for total control of Volkswagen as it ran out of money to buy more shares. Buying more than 50 per cent of shares left Porsche with more than €9bn debt and difficulties refinancing its loans.
Any investment by QIA, which could not be reached for comment, would come as part of a capital increase of up to €4.5bn. Part of that bill would be paid by the Porsche and Piëch family owners.
It remained unclear on Monday how much QIA was willing to pay for a large stake in Porsche. Porsche’s current market value is €8.2bn, so a 25 per cent stake would be worth more than €2bn. A sale to an outside investor would break with a taboo of the sports carmaker’s family owners. In the 1980s, the family blocked an attempt by one Piëch family member to sell to an Arab investor.
However, the reputation of Middle East investors has risen in Germany after Daimler, a fellow Stuttgart-based premium carmaker, recently lured Abu-Dhabi-based Aabar as an anchor investor.
Volkswagen said on Monday it would support investment from Qatar. “In principle we view this positively since it would accelerate the process to form an integrated group with 10 brands,” a spokesman said.
Mr Piëch last month called on Porsche to sort out its financial problems ahead of any merger between the two companies.
But the family patriarch and grandson of Ferdinand Porsche, the creator of the VW Beetle, has in the past favoured Porsche to be taken over by VW, which would secure his tight grip over Volkswagen.
Porsche declined to comment on talks with possible investors.
Porsche is seeking a €1.75bn loan from Germany’s government economic stimulus programme to secure the final amount of refinancing it needs. The government on Monday postponed a decision on the loan
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