Porsche Dilemma: Firesale or Bankruptcy?

The Porsche drama has morphed into a full blown tragedy: Porsche (POAHF.PK) has until Monday to decide whether it is willing to accept what is essentially a firesale bid by Volkswagen (VLKAY.PK) and Lower Saxony for 49% of the company in exchange for €3-4 billion. As a result of the transaction, the two companies would merge, with the Piech and Porsche controlling a 40% stake, Lower Saxony owning 20%, Qatar 15%, and a separate state fund having a 5% stake.

Qatar has made it clear that it would only participate in a deal that involves all the listed parties and will not be last ditch white knight. If Porsche does not accept by Tuesday, the deal will be pulled, and Porsche will have to pay back a €700 million loan to VW. (click on chart to enlarge)



Source: Spiegel, hat tip Doru

Comments

[hbball:]

This is a very sensationalist headline without anything to back it up.

There's no fact cited as to when VW can legally demand the money pursuant to the loan.

As for bankruptcy, it seems ridiculous to suggest that Porsche SE, which owns over 50% of VW, along with options to purchase at least another 20% of VW would somehow go bankrupt if required to immediately pay 700 million Euros to VW. Why wouldn't Porsche just sell some of its VW stock (market cap = $80 Billion Euros what to avert bankruptcy)? Any article suggesting bankruptcy ought to address these points.

Jun 28 11:43 AM

[a. palmer jr.:]

I always thought Porsche and VW were the same company, with Porsche building the high end cars and VW the rest. I guess you learn something every day!

Jun 29 03:02 PM

[Pstoneki:]

Drama with no basis in reality.

Jun 29 03:46 PM

[Rollerball:]

Some people just don't know sarcasm when it's staring them in the face. Was POAHF.PK on anyone's "conviction" buy list?

Jun 29 05:42 PM

[Old Trader:]

hbball,

Evidently Porsche borrowed billions in their efforts to gain control of VW.....and now the piper must be paid.


On Jun 28 11:43 AM hbball wrote:

> This is a very sensationalist headline without anything to back it
> up.
>
> There's no fact cited as to when VW can legally demand the money
> pursuant to the loan.
>
> As for bankruptcy, it seems ridiculous to suggest that Porsche SE,
> which owns over 50% of VW, along with options to purchase at least
> another 20% of VW would somehow go bankrupt if required to immediately
> pay 700 million Euros to VW. Why wouldn't Porsche just sell some
> of its VW stock (market cap = $80 Billion Euros what to avert bankruptcy)?
> Any article suggesting bankruptcy ought to address these points.

Jun 29 07:25 PM

[hbball:]

On Jun 29 05:42 PM Rollerball wrote:

> Some people just don't know sarcasm when it's staring them in the
> face. Was POAHF.PK on anyone's "conviction" buy list?

Yeah, you're right, I was being like totally sarcastic when I said that this article that wasn't based on facts had no facts. I guess you didn't get it.

Jun 29 09:04 PM

[hbball:]

Yes, they have debt, some which might be demanded to be paid back soon, but nobody's talking about their liquid assets (namely shares of 50% of VW) as a potential last-resort source to pay back the debt.


On Jun 29 07:25 PM Old Trader wrote:

> hbball,
>
> Evidently Porsche borrowed billions in their efforts to gain control
> of VW.....and now the piper must be paid.

Jun 29 09:06 PM