Saturday June 20, 05:17 PM
German bank opposes massive loan to Porsche: minister
FRANKFURT (AFP) - German state-owned bank KfW is opposed to a massive loan request from ailing luxury car maker Porsche (Xetra: POR3.DE - news) and its chances of obtaining any public aid are slim, according to the economy minister.
Karl-Theodor zu Guttenberg, in an interview with the Bild daily to be published Sunday, confirmed that KfW was not in favour of Porsche's bid for a 1.75 billion euro (2.4 billion dollar) loan.
The final word rests with a government commission, which is to meet at a yet-undecided date.
"Objectively, the chances of receiving a positive reply are becoming slimmer following the negative opinion issued by KfW," the minister said.
Porsche has debts of nine billion euros after it bought a 51 percent stake in Volkswagen (Xetra: 766400 - news) (VW) and is having trouble getting more loans. It was forced to abandon its plan to take over VW and said the two planned to merge instead.
Porsche is crushed by nine billion euros in debt run up while it tried to take over Volkswagen, the biggest European car maker, through the purchases of complex stock options.
Porsche currently owns around 51 percent of the shares in VW and had hoped to raise that stake to 75 percent. It now says the two companies will merge.
Many German politicians feel Porsche does not qualify for state aid as a victim of the global financial crisis, but brought its troubles on itself through market speculation and faulty business strategy.
Like other high-end auto manufacturers, Porsche has also been hit by the crisis, and said Friday that its sales fell by 15 percent to 4.6 billion euros in the first nine months of its fiscal year, which began on August 1.
It is now in talks with the Gulf state of Qatar on selling a stake reported to be 25 percent plus one share, which would represent a blocking minority holding, or even more.
That would represent a major change for Porsche, which is controlled at present by the Porsche and Piech families.
The website of the monthly Manager Magazine, giving no sources, also said Saturday that talks are at an advanced stage with rival Daimler (Xetra: 710000 - news) , which could result in the owner of the Mercedes brand subscribing to a new Porsche capital issue.
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