Porsche goes cap in hand to Qatar

PORSCHE has reportedly offered the Middle Eastern Gulf state of Qatar a 25 per cent stake in the company to help cover a cash shortfall after its aborted takeover of Volkswagen.

The London Financial Times reported on Tuesday that Porsche chief executive Wendelin Weideking had already met with representatives of the Qatar Investment Authority (QIT).

If the negotiations are successful, the sale could raise about €2 billion ($A3.5 billion) at the expense of full control of Porsche by the descendents of company founder Ferdinand Porsche.

Porsche needed €10 billion ($A17.5 billion) to repay some of the huge loans raised to pay for VW shares, plus €2.5 billion ($A4.4 billion) for cash flow to keep Porsche operating through the global financial crisis.

Porsche has approached the German state-owned KfW bank for a €1.75 billion loan to plug the shortfall but the amount requested is several times more than the stipulated limit of €300 million and Porsche is still waiting for an answer.

The decision to sell a 25 per cent stake in the company is seen as a last resort, as Porsche’s issued capital has been tightly held until now.

The Porsche and Piech families control half the issued capital, owning 87.5 million ordinary shares. A further 87.5 million preference shares are traded on the share market.

It is believed the families would participate in any capital raising on a pro rata basis.

At the close of trade on Monday, these preference shares were valued at €46.6 each, valuing all the preference shares at €4.08 billion and the whole company at €8.16 billion.

Read more:

Porsche puts hand out for another loan

VW gets tough with Porsche on finances

Porsche pulls handbrake on VW takeover