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Debt-riddled Porsche receives $980 million lifeline from Volkswagen


Porsche is currently sitting on about $15 billion in debt, including the $980 million from VW

Porsche is currently sitting on about $15 billion in debt, including the $980 million from VW

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There was a point in time when Porsche was the veritable king of carmakers, boasting strong sales, record profits and virtually unmatched customer loyalty numbers even while many of its rivals teetered on the edge of bankruptcy. But like all things that go up, there was bound to be an inevitable slide, and in the latest news surrounding debt-struck Porsche the company has been given a €700 million ($980 million) lifeline from Volkswagen.

The situation is a far cry from where Porsche stood just a few months ago, when it was attempting a takeover of VW. Now, it’s hoping for a merger but despite the change in situation Porsche is adamant that it’s not on the verge of insolvency.

In spite of the fact that Porsche owns 51% of VW, massive debts have forced the company to abandon its attempts to increase its stake in VW. At the start of this year, Porsche was operating under the shadow of a €9 billion debt, and the company was seeking around €10 billion in loans to help it refinance this debt.

Porsche is currently sitting on about €10.75 billion ($15 billion) in loaned funds, including the €700 million ($980 million) from VW, reports Automotive News.

For now, talks between Porsche and VW will continue about a possible merger, and in the meantime Porsche will also be looking for an extra €1.75 billion in loans to help keep the company propped up during the current financial crisis - a request to the German government for financial aid hasn't exactly been met with wide-spread support, and Porsche may have to seek other avenues for financing.
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Comments (7)
  1. So much for an independent Porsche, more than likely they'll be another VW brand, unless FIAT swoops in.
     
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  2. Ahh how the tables have turned as yet again to big of an ego foils ones plans for supremacy!!!

    Porsche-a-philes must be going nuts right now.
     
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  3. Porsche has gone lazy and tired, all they did for the past several years was simply updated their tech and mechanical skills and poured it into one car and cloned this car onto different ones.
     
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  4. Ahh how the tables have turned as yet again to big of an ego foils ones plans for supremacy!!!

    Porsche-a-philes must be going nuts right now.

    yes im going nuts...aargh

    simple fact is that Porsche have kicked themselves in the backsides. They tried to ride the coat-tails of VW, and by having 2 Porsche comnpanies didnt help either. buying a majority share in a company that you ultimately wanted to buy you out was always a risky venture, and its seems the Deutsche Bundesbank is telling them to F off.

    Bring back the idea for a smaller than boxster porsche and they will be onto a winner !
     
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  5. Remember the days when Porsche was profitable and was taking over the larger parent company, well, life just sucks for them now
     
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  6. Remember the days when Porsche was profitable and was taking over the larger parent company, well, life just sucks for them now

    yes indeed. But live by the sword die by the sword. Maybe by VW bailign them out they will utilise Porsche Tech and develop a cross family small coupe that Audi, Seat, VW, Porsche can all use.
    VW - everymans version
    Seat - quirky version
    Audi - luxury version
    Porsche Sporty version

    bit of a no brainer really !
     
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  7. I remember reading they made €7billion or so through it's hedge fund and just €1billion through car sales

    Guess the market titsing up didn't help Porsche out at all. What made them really rich is now biting them in the arse!
     
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