Porsche approves negotiations with Qatar
Frankfurt, July 23, 2009
Porsche's board of directors endorsed negotiations for the sale of a stake to Qatar and to prepare a capital increase of at least five billion euros.
The steps approved at an extraordinary night time meeting early Thursday (July 23) were made as the Stuttgart-based auto maker enters the final stretch of negotiations to create an integrated auto firm with Volkswagen.
'In its extraordinary meeting on Wednesday, the supervisory board of Porsche Automobil Holding SE, Stuttgart, has unanimously authorized the board of management to finalise talks with Qatar Holding (QH) over an investment in Porsche SE,' it said in a brief statement.
The unanimous approval of the supervisory board signals that Porsche's owning families, the Piech and Porsche clans, may be open to surrendering some of their influence at the sportscar maker to an outsider. A Porsche spokesman declined to comment further on the matter.
The Porsche and Piech families control 100 per cent of Porsche's voting shares and have resisted selling a stake to an outsider in the past.
Porsche's Chief Executive Wendelin Wiedeking has sought to bolster Porsche's balance sheet as the auto maker has struggled to raise funds to pay more than 10 billion euros ($14.23 billion) in debt.
Porsche amassed the debt as it tried to buy a 75 per cent stake in VW, a move which backfired as credit markets turned sour, leaving Porsche struggling with a pile of debt.
The meeting, which was convened a day earlier than expected, also approved a proposal by Porsche's board to prepare for a capital increase of at least five billion euros in cash and/or a contribution in kind, the company said.
Porsche, which owns a 51 per cent stake in VW, is now seeking to bolster its finances before sitting down to merger talks with Volkswagen.
Porsche has a two tier system of management with a 12-member board of directors headed by Wolfgang Porsche and a 6-member management board headed by Wendelin Wiedeking. – Reuters