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Business

Porsche management get go-ahead for Qatar deal

©

Video by Nicholas RUSHWORTH

Text by NEWS WIRES

Latest update : 2009-07-23

Porsche has opened the way to Gulf state Qatar taking a stake in the German luxury car maker prior to creation of an integrated group with Volkswagen.

AFP - German luxury car maker Porsche opened the way Thursday to the Gulf state of Qatar taking a stake in it prior to creation of an integrated group with Volkswagen.
  
"The supervisory committee of Porsche at an extraordinary meeting unanimously gave power to the management to seal the discussions with Qatar Holding LLC on a raising of Porsche's capital" said a very brief communique issued early Thursday.
  
A little earlier Porsche had announced that it would seek a boost in capital of at least five billion euros, without however saying who would take part.
  
The decision was taken at a meeting of the supervisory committee that started Wednesday in Weissach near Stuttgart in southwestern Germany, one day ahead of schedule, in a bid to seal a historic alliance with German automaker Volkswagen.
  
"The basis for the creation of an integrated group between Porsche SE and Volkswagen AG has thus been laid," the builder of the 911 sports car said in a brief statement.
  
The announcements are in line with the plans prepared by Porsche boss Wendelin Wiedeking for the company, which owns about 51 percent of Volkswagen, to pay off, at least partially, its roughly 10 billion euros (14.2 billion dollars) in debt.
  
Wiedeking wanted to maintain the independence of his group, which could however be compromised by the creation of an integrated group with VW. Recent press reports have said the Porsche boss was on his way out.
  
The 12 members of the supervisory committee, who were originally to have met Thursday afternoon, were to examine two competing offers to ensure the future of Porsche.
  
The first offer was designed by the Porsche management and its contested boss Wendelin Wiedeking. That proposal calls for the Gulf state of Qatar to take a major stake in Porsche and to buy VW stock options owned by Porsche.
  
The second offer came from VW, which would buy Porsche's core automaking activities, making it VW's 10th brand, with Qatar possibly investing in the integrated company.
  
A meeting of VW's surveillance committee is scheduled for 10 GMT Thursday in Stuttgart.
  
The two groups have been closely linked since January when Porsche acquired almost 51 percent of the shares in VW, the biggest auto maker in Europe.
  
Porsche, burdened with debt, abandoned in May a plan to take full control of VW and its hefty reserves of liquidity, and must now find other sources of financing.
  
The German state of Lower Saxony, which owns 20 percent of VW and holds a veto over its strategic decisions, stood between Porsche and VW's cash.
  

Date created : 2009-07-23

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