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.
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.