German government planning to deny Porsche’s loan request
By Andrew C., 30 Aug, 2010. 0 Comments
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There are reports emerging that the government of Germany is planning to deny Porsche its request for a 1.75 billion Euro state loan. The carmaker applied for the loan earl this month to alleviate its financing crisis after a failed attempt to takeover VW. Porsche is under a pile of 9 billion Euros in debts. The state's denial of the loan came under advisement from the state-owned bank KfW. The decision, which has a current status of informal will be formalized by a state committee this coming July, putting more heat on Porsche.
It is also known that Porsche is trying to cut a deal with Qatar by selling 25 percent of its stake for 2.5 billion Euros. New reports coming out are saying that Qatar is planning to increase its stakes in the carmaker and that Daimler may also attempt to purchase a stake in the ailing car company or loan Porsche money instead.
This has been an distressing for VW, which sees Porsche as shying away from an understanding by its controlling families the previous month. VW sought to end Porsche's financing crisis by a merger of the two car companies, but it seems that top officials in the company are in fact attempting to avoid this. On the other hand, Porsche has not yet lost its opportunity to renew its application for government loan through KfW, although some say that the chances are slim this time around. This is due to skepticism concerning Porsche's aim by the ruling left-right coalition.
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