Porsche Automobil Holding SE’s debt pile from its attempt to take over the much larger Volkswagen may be larger than the company has admitted according to Germany’s Bild newspaper today.
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It said the debt was close to EUR14bn (US$19.7bn), much higher than the previously reported EUR9bn (US$12.2bn). Sources have also told Reuters that Porsche’s debt was “clearly” higher than EUR10bn (US$13.5bn).
As a result of the immense debt, Der Spiegel reported on Saturday, Volkswagen would pay EUR8bn (US$10.8bn) to the holding company for its sports car business, Porsche AG. The two companies are to decide on the issue on 23 July.
Financial Times Deutschland reported at the weekend that Uwe Hueck, Porsche’s works council leader, opposed the plan for Porsche to become VW’s 10th brand because he saw this as a complete takeover of the sports car specialist rather than a merger.
He feared a takeover would endanger the 11,000 jobs at Porsche and fulfil only the dream of VW’s patriarch Ferdinand Piech.
Hueck also called on the premier of Baden-Wuerttemberg, Guenther Oettinger, to fight for the preservation of the jobs within the state.
According to media reports, the works council and trade union IG Metall plan sit ins at Porsche’s sites in Zuffenhausen and Weissach, as well as open-ended strikes to demand the autonomy.
Meanwhile, Porsche AG’s embattled chief executive Wendelin Wiedeking could receive a EUR100m (US$140m) ‘golden parachute’ to leave his position following a merger with Volkswagen AG.
The Bild am Sonntag weekly said that it was no longer a question of if Wiedeking steps down, but when and how. It adds that this could happen this week following board meetings of the two companies on Thursday.
Despite strenuous denials by Porsche, several recent news reports say that Wiedeking’s days are numbered after the company built an enormous debt pile in its failed attempt to take control of the much larger VW.
Wiedeking is currently in talks with Qatar about the Gulf state buying a stake to reduce that debt.
