Porche skirted bankruptcy in March
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Porche skirted bankruptcy in March
REPORT: Porsche facing dire times, actually skirted bankruptcy in March
These are some confusing times in the automotive world. For the past few years, it seemed as though Porsche was primed to rule the world. It was selling plenty of product, and more importantly, it was quickly gobbling up shares of German juggernaut Volkswagen. Dried-up credit markets and slow sales have conspired to put a big wrench in Porsche's plans, though.
We already knew that the Stuttgart sports car (and SUV) maker has ditched plans to take over VW and instead plans to merge the two companies. German magazine Der Spiegel (via The Local) is reporting that times are so tight at Porsche that it actually skirted bankruptcy for three days in March. The German automaker received a 700 million euro loan ($978 million USD) from VW to stay out of trouble, but needs another 2.5 billion euros (nearly $3.5B USD) to stay in business. Porsche has tried to tap the German government to receive more loans to pare down the enormous debt it had incurred in attempting to buy VW. In fact, Porsche, which sells fewer than 100,000 vehicles per year, has accrued an astonishing 9 billion euros worth of debt (around $12.6B USD). That's 50% more debt than Chrysler.
These are some confusing times in the automotive world. For the past few years, it seemed as though Porsche was primed to rule the world. It was selling plenty of product, and more importantly, it was quickly gobbling up shares of German juggernaut Volkswagen. Dried-up credit markets and slow sales have conspired to put a big wrench in Porsche's plans, though.
We already knew that the Stuttgart sports car (and SUV) maker has ditched plans to take over VW and instead plans to merge the two companies. German magazine Der Spiegel (via The Local) is reporting that times are so tight at Porsche that it actually skirted bankruptcy for three days in March. The German automaker received a 700 million euro loan ($978 million USD) from VW to stay out of trouble, but needs another 2.5 billion euros (nearly $3.5B USD) to stay in business. Porsche has tried to tap the German government to receive more loans to pare down the enormous debt it had incurred in attempting to buy VW. In fact, Porsche, which sells fewer than 100,000 vehicles per year, has accrued an astonishing 9 billion euros worth of debt (around $12.6B USD). That's 50% more debt than Chrysler.
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[Sarcasm]Actually, this is a lie. Only Detroit makes cars that aren't selling and needs bailouts to survive.[/Sarcasm]
It sucks for Porsche, however, I am surprised that more of the "upscale" automakers haven't showed greater signs of pain yet.
It sucks for Porsche, however, I am surprised that more of the "upscale" automakers haven't showed greater signs of pain yet.
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From: Melbourne, Australia
We're witnessing just how how fickle the entire auto industry can be... especially in these dire economic times.
Porsche were aiming to buy VW... and now allegedly facing BK?
Toyota were making billions in profits and suddenly made an annual loss in 2008 as big as its 2007 profit.
GM is bleeding money like at no other time in its history.
etc...
Porsche were aiming to buy VW... and now allegedly facing BK?
Toyota were making billions in profits and suddenly made an annual loss in 2008 as big as its 2007 profit.
GM is bleeding money like at no other time in its history.
etc...
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More to the story:
http://www.motorauthority.com/debt-r...olkswagen.html
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.
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.
Last edited by 95redLT1; May 26, 2009 at 09:37 AM.
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From: Melbourne, Australia
That can't be true. Porsche made their money on buying up VW stock, which made VW the most valuable automaker on the planet at one point, recently.
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While I don't take joy in seeing other carmakers fail, what we need desperately here in Detroit is to take the media spotlight off of the American Automakers. The light that's shining on us right now is "Look at how bad the American car companies are! They are filing bankruptcy left and right! Only foreign car companies are stable now."
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Considering that OUR government hasn't given billions upon billions of OUR dollars to Porsche than I really don't care. I don't know why some of you people can't grasp that.
