German state-owned bank KfW has rejected Porsche’s request for a multi-billion euro loan to relieve financial pressure created by the company’s failed attempt to take over Volkswagen.
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The sportscar maker confirmed that its request for EUR1.75bn (US$2.5bn) had been turned down and that it had no plans to renew its application but would look at “alternative financing possibilities.”
Porsche, until recently Europe’s most profitable carmaker, amassed some EUR9 bn in debt while building a 51% stake in VW last year. It is in talks with Qatar with a view to the Gulf state taking a stake. Porsche said that Qatar had made an offer to buy a stake as well as stock options that Porsche owns in VW.
Porsche has abandoned a full takeover of VW and the two companies are now seeking a merger. However this plans has been stalled by a struggle between Porsche’s owners, the Porsche and Piech families, who have different views about how to pull the firm out of its difficulties.
A spat between Porsche and VW also developed over the weekend with the larger carmaker allegedly issuing an ultimatum to work out the terms of the merger of the two companies, a move described by Porsche chairman Wolfgang Porsche and deputy Uwe Hück as tantamount to blackmail.
