No Loan For Porsche, German Bank Says
Porsche owns just over half of Volkswagen, and racked up mountains of debt in buying the stake.
June 30, 2009
Porsche will have to get more creative in its efforts to secure a $2.5 billion loan, saying Tuesday it has been denied by state-owned German bank Kreditanstalt für Wiederaufbau (KfW).
Porsche said it will begin talks for alternative financing possibilities, and declined the KfW’s suggestion that the company could reapply for a loan at another time: “In the interest of the company’s credibility, Porsche will, however, not resort to this offer.”
The automaker said the loan was to be used for operations and would not have burdened German taxpayers. “The KfW would have joined the syndicated credit now endorsed by 16 banks, which is subject to the usual market interest rates and is backed by Volkswagen shares as collateral."
Porsche owns just over half of Volkswagen, and racked up mountains of debt in buying the stake. On Monday, the car company said it would not sell the bulks of its stake back to VW. The story took another turn later Monday when the Qatar Investment Authority offered to buy a stake in Porsche.
Porsche and the sovereign wealth fund have been in talks for weeks about a possible investment. Porsche has more than $12 billion in debt, partly the result of its buying up Vollswagen shares. At the same time, the luxury automaker has been hit hard by the global economic slowdown.
In March, an Abu Dhabi investment firm acquired a 9.1% stake in German auto manufacturer Daimler. The firm, Aabar Investments PJSC, paid about $2.7 billion for 96.4 million Daimler shares, leaving Aabar as a the single largest shareholder of Daimler. Kuwait Petroleum Corp., a state-owned entity, also owns a 6.9% stake.
Aabar is controlled by Mansour bin Zayed al-Nahyan, Abu Dhabi’s minister of presidential affairs and brother of the President, Sheikh Khalifa bin Zayed Al Nahyan.
The investment fund’s largest stakeholder is the International Petroleum Investment Co., which is owned by the Government of the Emirate of Abu Dhabi.
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