Porsche AG has launched syndication of a 2.5 billion euro ($3.39 billion) loan, according to two bankers who are familiar with the matter. At the end of last year, a syndicate of seven banks had arranged the loan.

To reduce their exposure, these banks decided to launch a round of general syndication. Porsche’s massive debt is a result of a failed attempt to take over Volkswagen AG. In its interim report for the first quarter 2009-2010, the carmaker secured a new credit line of up to 2.5 billion euros to refinance existing debt and to make sure that there’s sufficient financial headroom. Porsche AG’s new loan is set to mature in December 2011 and has a one-year extension option. The bankers also said that the loan is being arranged by LBBW, Bank of America Merrill Lynch, Citigroup, HSBC, JP Morgan, Societe Generale and Royal Bank of Scotland.

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There have been reports that Porsche Automobil Holding SE is pushing to get an 8.5 billion euro ($12.62 billion) loan by Nov. 10. This is actually a reduction of a previous figure of 10.5 billion euros using proceeds from the planned sale of 49.9 percent of Porsche SE’s sports car making unit Porsche AG to Volkswagen AG, according to two bankers close to the deal. Continued after the jump!

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It was reported that the ailing carmaker Porsche requested assistance from the German state bank KfW in the amount of 1.75 billion Euros. It is known that the carmaker has a 9 billion Euro debt left over from its previous failed attempt to takeover the entire VW group of companies.

There are internal arrangements between Porsche’s top officials and union officials that no public discussions of the company’s debt is allowed since this might be detrimental to the German bank’s decision to provide the needed assistance. The reported sale of some of its stakes to the Qatar Investment Authority is one of Porsche’s strategies to ease its debt burden. Continued after the jump!

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It was made public by Porsche that it intends to request aid from the German state bank KfW in the amount of 1.75 billion Euros. Porsche intends to pay back the loan with interest, although it also emphasized that there is no guarantee that the loan will be released.

The carmaker attempted to raise 12.5 billion Euros last March in loans to refinance its liabilities, although it only succeeded in raising 10 billion Euros . VW granted Porsche a 700 million Euro ( loan last week to help the latter cope with its deficit. Porsche, which owns 51% of VW abandoned its intended total takeover of German company last January, when it incurred a 9 billion euro debt. The topic of discussion at present is a merger between Porsche and VW.

Tags:car news, porsche loan, porsche loan news
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