PAG was nearly bankrupt in March...
05-25-2009, 03:36 PM
#1
Nordschleife Master
Thread Starter
PAG was nearly bankrupt in March...
PAG was nearly bankrupt in March due to the unraveling financial games it played:
"... the Stuttgart-based carmaker teetered on the brink of bankruptcy for three days in March this year before it was rescued by a bridging loan of over €700 million guaranteed by Volkswagen."
Read more HERE.
More details from Der Spiegel.
"... the Stuttgart-based carmaker teetered on the brink of bankruptcy for three days in March this year before it was rescued by a bridging loan of over €700 million guaranteed by Volkswagen."
Read more HERE.
More details from Der Spiegel.
Last edited by ADias; 05-25-2009 at 03:53 PM.
05-25-2009, 03:46 PM
#2
Nordschleife Master
Report says cash-strapped Porsche needs further billions
Porsche is starting to look a bit like GM ... government loans are coming ...
Report says cash-strapped Porsche needs further billions
Published: 23 May 09 15:24 CET
Online: http://www.thelocal.de/national/20090523-19465.html
Ailing sports carmaker Porsche’s financial troubles are much worse than feared and the company needs another cash injection of €2.5 billion, news magazine Der Spiegel reported on Saturday. The magazine said the Stuttgart-based carmaker teetered on the brink of bankruptcy for three days in March this year before it was rescued by a bridging loan of over €700 million guaranteed by Volkswagen.
The report said that loan guarantee however was only valid for a year. Porsche needs €2.5 billion euros right away to finance its operations, the magazine said, adding the carmaker had only received a fraction of what it needed. Earlier this week, the German government said it was holding back on state aid to the heavily indebted luxury car maker as it seeks to recover from costly efforts to acquire its rival Volkswagen.
"It was too early to decide" whether to bail out the company which had applied for state aid, an economy ministry spokesman told AFP after Porsche's request was examined on Wednesday evening. German daily Handelsblatt reported on its website that Porsche had requested at least €100 million from a government stimulus fund that provides guarantees or credits to firms struggling in the crisis.
Porsche has debts of €9 billion after it bought a 51 percent stake in Volkswagen (VW) and is having trouble getting more loans.
It was forced to abandon its plan to take over VW and said the two planned to merge instead.
Published: 23 May 09 15:24 CET
Online: http://www.thelocal.de/national/20090523-19465.html
Ailing sports carmaker Porsche’s financial troubles are much worse than feared and the company needs another cash injection of €2.5 billion, news magazine Der Spiegel reported on Saturday. The magazine said the Stuttgart-based carmaker teetered on the brink of bankruptcy for three days in March this year before it was rescued by a bridging loan of over €700 million guaranteed by Volkswagen.
The report said that loan guarantee however was only valid for a year. Porsche needs €2.5 billion euros right away to finance its operations, the magazine said, adding the carmaker had only received a fraction of what it needed. Earlier this week, the German government said it was holding back on state aid to the heavily indebted luxury car maker as it seeks to recover from costly efforts to acquire its rival Volkswagen.
"It was too early to decide" whether to bail out the company which had applied for state aid, an economy ministry spokesman told AFP after Porsche's request was examined on Wednesday evening. German daily Handelsblatt reported on its website that Porsche had requested at least €100 million from a government stimulus fund that provides guarantees or credits to firms struggling in the crisis.
Porsche has debts of €9 billion after it bought a 51 percent stake in Volkswagen (VW) and is having trouble getting more loans.
It was forced to abandon its plan to take over VW and said the two planned to merge instead.
Last edited by FlatSix911; 05-25-2009 at 10:28 PM.
05-25-2009, 09:10 PM
#5
Nordschleife Master
Thread Starter
They need to be fuel averaged with a large high MPG supplier that's why both in the EU and the USA. Lambo and Bugatti part of VAG and Ferrari, Maserati part of Fiat are covered; PAG needs that too.
05-25-2009, 10:40 PM
#6
Drifting
They were lucky they had the sources of loans they had - imagine if they had the US Treasury "helping" them, Porsche would belong to the UAW now.
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05-25-2009, 10:49 PM
#9
right now the reason they are in dire straits is that they are not SELLING cars at the same rate as they were 2 years ago. they lost 30+% of global sales during a global recession. A luxury product manufacturer with no economy cars to bolster sales in a downturn. It has nothing currently to do with CAFE. If they do not become acquired by a larger parent such as VAG then they will cease to exist.
05-25-2009, 11:35 PM
#10
Nordschleife Master
Thread Starter
right now the reason they are in dire straits is that they are not SELLING cars at the same rate as they were 2 years ago. they lost 30+% of global sales during a global recession. A luxury product manufacturer with no economy cars to bolster sales in a downturn. It has nothing currently to do with CAFE. If they do not become acquired by a larger parent such as VAG then they will cease to exist.
05-25-2009, 11:41 PM
#11
ADias dont get me wrong, i agree thats the reason for porsche wantign the merger/acquisition, but the current problem is likely due the the fact that they have not been able to sell high dollar luxury cars int he economic downturn and got caught overextended
It remains to be seen if VAG wants anything to do with the acquisition of their former attacker
It remains to be seen if VAG wants anything to do with the acquisition of their former attacker
05-25-2009, 11:47 PM
#12
Nordschleife Master
Thread Starter
ADias dont get me wrong, i agree thats the reason for porsche wantign the merger/acquisition, but the current problem is likely due the the fact that they have not been able to sell high dollar luxury cars int he economic downturn and got caught overextended
It remains to be seen if VAG wants anything to do with the acquisition of their former attacker
It remains to be seen if VAG wants anything to do with the acquisition of their former attacker
One thing is clear. PAG is in trouble and VAG has the upper hand, unless a 'white knight' shows up. And it may show up, we shall see.
VAG is involved either they want it or not. No company, especially in Europe, is going to be in the sidelines when 51% of its stock is in jeopardy.
I also think that WW is history. Have you noticed that WW and Wolfgang say they were caught surprised by these events !? Who's minding the store?
05-25-2009, 11:50 PM
#13
yes. i did realize that and i think you are correct regarding the shell game financing. The scariest part is that there has been no full disclosure of the porsche balance sheets
I am surprised this did not get more "play" here in the states..
I am surprised this did not get more "play" here in the states..
05-25-2009, 11:54 PM
#14
Burning Brakes
If Porsche had stuck to its knitting, that is, its core business of producing luxury, sporting vehicles at a structurally high net margin...then they'd be enjoying a significant cash position or legacy entering this period of profound recession.
Granted they would have to curtail production, belt tighten and foregone certain ambitions..but a strong balance sheet should have given them the wherewhithal to ride out the storm.
Rather WW, and Pieh have been pursuing grand, expansionary, indulgent dreams....and it seems tears are rapidly becoming the order...
Foolish.
Granted they would have to curtail production, belt tighten and foregone certain ambitions..but a strong balance sheet should have given them the wherewhithal to ride out the storm.
Rather WW, and Pieh have been pursuing grand, expansionary, indulgent dreams....and it seems tears are rapidly becoming the order...
Foolish.
05-26-2009, 12:08 AM
#15
Burning Brakes
Okay, help me here...as a little investor. So, when P was buying VW secretely no body really knew how much stocks P had of VW. When they controlled VW stock they made billions and everybody thought it was brilliant. In March P is nearly bankrupt, they get $$$$$ from VW and nobody knows about it till now. So, if you are investor in P or for that matter any european company, shouldn't you know this information as its happening so we can make a smart investment? Makes me a little anxious about investing in asia and europe....lord knows american companies have had their share of devious behavior. Although Wallstreet is flawed and poorly regulated....it appears that the world's market could be even more secretive and flawed than ours.
Now why is this important...because in the future you, me, our children are going to want to invest which hopefully will help with capital into these companies instead of having government owned companies. But who will want to invest if you can't make a smart decision...only the big boys inside know what is going on. Reminds me of that little energy company in Texas.
Chinese stocks anybody?
abe
Now why is this important...because in the future you, me, our children are going to want to invest which hopefully will help with capital into these companies instead of having government owned companies. But who will want to invest if you can't make a smart decision...only the big boys inside know what is going on. Reminds me of that little energy company in Texas.
Chinese stocks anybody?
abe