Porsche and Volkswagen once happily co-existed under the same corporate umbrella, but recent financial trouble at Porsche has found the two German automakers at odds. VW floated Porsche a $983.8 million loan late last year, with the deadline for repayment on that loan quickly approaching. In lieu of that repayment VW has reportedly offered Porsche an ultimatum, causing a rift between the two companies.
According to a report published by Der Spiegel magazine, VW has pressed Porsche to accept a deal that would see VW taking a 49 percent stake in the German sports car maker for between $4.2 billion and $5.6 billion. If Porsche refuses the offer, VW will reportedly uphold the September repayment of its $983.8 million loan.
Porsche, clearly unhappy with the demand, has spoken out against the VW offer. “We will not accept extortion. … Ultimatums do not belong in the 21st century,” Porsche said in a statement.
A VW spokesman responded by telling Automotive News “there is no ultimatum.”
VW may not be calling the offer an ultimatum, but there is likely a similar deal on the table. Thanks to its failed attempt to takeover VW, Porsche has racked up more than $12 billion in debt, causing a cash shortfall of at least $3.5 billion. A government bailout is looking less likely by the day, leaving Porsche with few options.
However, an investment deal with Qatar could give Porsche enough cash to repay VW by the September deadline. A deal between the two could be announced by next month, saving Porsche just before the bell. Stay tuned as we expect more on the Porsche-VW saga in the coming days.
06/29, 12:39 PM
posted by:
cocojoe53
This is a intresting turn around. It appeares that Porsche’s days of independence are coming to an end.
06/29, 12:49 PM
posted by:
mayer_ray_nagin
The say they wont accept extortion but they have no problem extorting people for their POrSches, do they?
Now, if this were to occur in the USA and a secured creditor like VW dared to insist on its legal rights, the federal government would step in, steal Porsche, and give it to the poltician’s favorite dingleberries (aka those who hang around ässhöle politicians). Hopefully in Germany rule of law and sanity will be maintained, unlike in the USSA.
06/29, 12:50 PM
posted by:
idrinorbarsaku
That’s not an extortion! They are keeping the payment deadline the same, while also adding an option where they don’t have to pay! How is that extortion, they are just bitching because they cant pay it!
06/29, 1:07 PM
posted by:
JakeK66
I can only hope VW buys out Porsche before Qatar comes into the mix. It isn’t VW’s fault they aren’t as f*cked up as Porsche. The Porsche brand can bemefit from a VW takeover, Porsche can help VW in very little, take a look at the R8 and I rest my case.
06/29, 1:10 PM
posted by:
Borat
MRN, German rule of law is actually allows ownership of VW to state of Lower Saxony and employees are working 28(!) hours per week. The grass is greener, but not there. And it was not East Germany, we are talking West.
06/29, 1:36 PM
posted by:
05Z88Path
hahaha….well Porsche there’s a saying, “What goes around, comes around”….
06/29, 1:52 PM
posted by:
shaver
I dont like the idea of VW running, Lambo, Porcshe and Audi. They should compete.
06/29, 1:56 PM
posted by:
mayer_ray_nagin
Borat, that is correct, but that is a rule of law that was set in stone upon the founding of VW – it is not a rule that Lower Saxony stole VW and then subsequently imposed. Big difference. Rules established at the beginning and adhered to are fine.
Now, the 28 hour thing? That’s BS but if VW agreed to it then VW shluld suffer, much like the Detroit and the Screw-Ayyyy-Doubleyou.
06/29, 2:15 PM
posted by:
SomeGreek
Not everyone has to fail like GM, Mrn… Some people make things work. Some don’t. It happens.
06/29, 3:21 PM
posted by:
johnnycanuck
There’s only one way to settle this: beerfest.
06/29, 4:19 PM
posted by:
idrinorbarsaku
ohhh I love beerfests!
06/29, 4:26 PM
posted by:
mayer_ray_nagin
Hier ist Dein Bierfest, Johnny! http://www.bendecho.com/bbfd596931-bierfest
That was my typical day at the Oktoberfest every year … in your best bavarian dialect now ….
………………. Bayern des samma mia
………………. Bayern und des bayrische Bier
………………. Bayern und des Reinheitsgebot
………………. Des is unser flüssiges Brot
06/29, 10:02 PM
posted by:
Veda
“We will not accept extortion. … Ultimatums do not belong in the 21st century,â€
So they’d rather sell themselves to the arabs than to kneel before their cousins?
06/30, 4:21 AM
posted by:
fan
this is why you should never lend money to family members…
06/30, 7:02 PM
posted by:
A4
HAHAHA MY MY HOW THE TABLES HAVE TURNED PORSCHE!
Thats what you get for trying to take over VW. It was like a midget had arnold schwarzenegger tied to a chair and now arnie broke free.
07/02, 12:18 AM
posted by:
1c3d0g
Duh!!! Porsche always sold overpriced cars, no wonder one day it was gonna come back and bite them in the ass. They never were a really independent company, they were always trying to hide under some company’s umbrella. Porsche, you are going down.