Tuesday June 9, 03:36 PM
Qatar negotiates for stake in Porsche
FRANKFURT (AFP) - German luxury sportscar maker Porsche (Xetra: POR3.DE - news) said Tuesday that the state of Qatar was negotiating with it as the exclusive candidate to buy a stake in the heavily-indebted company.
"We are currently speaking only with Qatar," a Porsche spokesman told AFP.
"The talks are marked by a good atmosphere," he added, without providing details. "All variations are under discussion."
Porsche is being crushed by nine billion euros (12.5 billion dollars) in debt incurred when it tried to take over Volkswagen (Xetra: 766400 - news) , the biggest European carmaker in which Porsche now holds a stake of 51 percent.
Porsche abandoned its bid to take full control of VW last month and the two car makers said they would discuss terms of a merger, but disagreements quickly surfaced between the Porsche and Piech families that control both companies.
No timeframe for further talks has been made public.
"If the talks are continuing, it is in a confidential manner," a VW spokesman told AFP.
"Our majority shareholder is negotiating with a new investor," he noted.
"For us, one thing is clear, any option that supports the goal of an integrated group with 10 brands, would be considered in a positive light."
But, he added, "we are waiting to see what happens in Stuttgart," the southwestern German home of Porsche, the spokesman said.
Qatar could buy shares in Porsche via a capital increase, or shares in VW by paying Porsche for stock options.
Investing in Porsche would allow the car maker to revive its original plan of taking over the much bigger VW.
It would also mark the second major investment by Middle Eastern interests in Germany's auto sector.
In late March, the Abu Dhabi state investment fund Aabar Investments bought a nine percent stake in Daimler (Xetra: 710000 - news) , which owns Mercedes-Benz.
Porsche raised a fuss recently by asking for aid in the form of a 1.75-billion-euro (2.43-billion-dollar) credit from the state-owned bank KfW.
It is still waiting for the government's response, but observers say Porsche's chances are not good.
The company initially earned billions of euros through complex speculative transactions in options on VW shares.
Porsche used such VW-based instruments to make huge profits in the past two years, but the scheme then backfired, leaving Porsche heavily in debt.
In afternoon Frankfurt trading, VW shares showed a gain of 1.65 percent at 253.11 euros, while the DAX index (Xetra: news) of leading shares was slightly lower overall.
Porsche shares had lost 0.43 percent at 46.80 euros in over-the-counter trading.
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