Under pressure car maker faces new ignominy
22 June 2009

Porsche is set to face the ignominy of being refused a 1.75 billion Euro (£1.5 billion) state loan, according to reports.

Porsche applied for the loan earlier this month in a bid to ease its financing problems in the wake of its stalled bid for rival Volkswagen. It is currently 9 billion Euros (£7.5 billion) in debt.

Read Hilton Holloway's analysis: 'Porsche struggles to service debt'

See all the latest Porsche reviews, news and video

A senior government official has told the Financial Times newspaper that the chancellery and the finance and economics ministries had “informally agreed” to deny the company’s request after state-owned bank KfW advised against the move.

The decision, which could be formalised by a government committee by July, would raise the pressure on Porsche, whose search for cash is reported to be widening.

Porsche's chief executive Wendelin Wiedeking is in talks for the Qatar Investment Authority to invest up to 2.5 billion Euros (£2.1 billion) for a stake of about 25 per cent in the company.

However, new reports suggest Qatar may increase its stake further and that Daimler may either try to aquire a stake in Porsche or loan it money.

Daimler 'joins Porsche bidding'

That has upset VW, which sees Porsche as backing away from an agreement made by its controlling families last month. It sought to end Porsche’s financing woes by merging the two carmakers, but Porsche's executives are reported to be desparate to avoid this.

Porsche still has a chance to secure government funding as it can rework its application to KfW, but insiders say the chance of success is slim.

But, with ministers in the ruling left-right coalition voicing their scepticism about Porsche’s aim, its chances are slim.

Porsche has declined to comment on the status of its loan application.

Add your comment

Log in or register to post comments

Find an Autocar car review

Driven this week

  • Volvo V90
    First Drive
    19 October 2017
    The Volvo V90 is a big estate ploughing its own furrow. We’re about to see if it is refreshing or misguided
  • Kia Stonic
    First Drive
    18 October 2017
    Handsome entrant into the bulging small crossover market has a strong engine and agile handling, but isn’t as comfortable or complete as rivals
  • Hyundai Kona
    First Drive
    18 October 2017
    Hyundai's funky-looking Kona crossover with a peppy three-cylinder engine makes all the right noises for the car to be a success in a crowded segment
  • Citroën C3 Aircross
    First Drive
    17 October 2017
    The Citroen C3 Aircross has got funky looks and a charming interior, but it's another small SUV, and another dynamic miss. Numb steering is just one thing keeping it from class best
  • Skoda-Karoq 2.0 TDI 4x4
    First Drive
    16 October 2017
    Diesel version of Skoda’s junior SUV is unobtrusive and undemanding, but we’d still go for the silkier petrol version of the Karoq