... OK not bust perhaps but who screwed who?
www.telegraph.co.uk/finance/newsbysector/retailand...l
Edited by AlanGowdy on 26/05/2009 at 01:33
|
"During the three days from March 22 to 24, according to the statements of a number of those present, Porsche had to ward off an impending bankruptcy. Even German Chancellor Angela Merkel intervened on the company's behalf."
tinyurl.com/psd6j9 - link to Spiegel Online
|
tinyurl.com/psd6j9 - link to Spiegel Online
What an extraordinary and complicated situation. Machiavelli could not have done better.
What's the betting that, when the dust finally settles, Porsche does not end up as yet another VW subsidiary?
|
|
These joining of equals don't appear to work in the automotive industry. See the FIAT GM merger which resulted in GM paying $2bn back in 2005 to walk away from the put option.
Edited by gmac on 26/05/2009 at 11:45
|
|
What an idiotic greed. From the most profitable carmaker, greed took them to taking massive loans and leverage themselvs to buy into VW. Now VW has to purchase them, but minus the massive debt. Plain stupid.
|
What an idiotic greed. From the most profitable carmaker
I'm not sure they were ever really the most profitable car by selling cars, they played with stocks and shares thats how they recovered from the early 90s.
|
|
Porsche does appear, on the face of it, to have made a considerable c**k-up of things.
|
|
What a great phrase - "financial acrobatics"
|
|
|
|
What an idiotic greed. From the most profitable carmaker, greed took them ...
For years Porsche have been a finance company making money with a small car builder/designer attached.... Looks like the finance side took too many risks.
The only reason Porsche were making so much profit for such a small company was risk. And until recently they got away with it.
|
Here is a nice overview: How Porsche hacked the financial system and made a killing radian.org/notebook/porsche
Agree with others, their focus was not in car making but financial madness.
|
Quite ironic though isn't it. Other companies including major car companies affected by the credit crunch. Porsche was involved in some of that speculating.
But they are not bust but now probably will end up as part of VAG instead of owning it. And that's ironic bearing in mind Piech grandfather designed the Beetle.
|
end up as part of VAG instead of owning it. >>
My head hurts! How does that work:
At the moment, Porsche own 51% of VAG.
So if 100% of VAG buy 100% of Porsche, do VAG end up owning 151% of VAG or what ?
I suppose it is like a dog eating itself starting at the tail and getting as far as the stomach before realising that it cannot swallow itself.
Edited by jbif on 27/05/2009 at 21:08
|
Porsche's position is not simple. They are having to unwind some of their deals. They won't own 51% (indeed they don't yet just a promise to buy). Trouble is they seem not to be able to afford the deals they promised to do.
Porsche probably could never buy all of VAG anyway. The lower State of Saxony would probably stop that and they own only 20% but there is the "VW law".
Basically Porsche have racked up huge debt to try to buy VW... and if it were not for the credit crunch it may have worked. Looking like it did not and the risk did not work out.
And when I say part of VAG... they will possibly merge so end result is Porsche part of VAG. They become one and the same. And Porsche as a brand will sit under the new company.
Edited by rtj70 on 27/05/2009 at 21:39
|
If 100% of VAG buy 100% of Porsche, do VAG end up owning 151% of VAG ?
I am given to understand that Nissan owns 30% of Renault, and Renault 30% of Nissan. I think the same argument applies, or is there some double-counting somewhere?
|
There is a new holding company beeing made, where Porsche will me just another brand under the umbrella of all other VW brands, retaining some brand independence.
Porsche shareholders will cough $6.7 billion in capital increase to soothe the 9Bn Euro in debt that Porsche has, through sale of Porsche shares, and possibly call in some Arab investors to sell approx. 30% of Porsche Holding.
It will take time to know precisely how deep has Porsche leveraged their shares as a collateral to Banks for using billions to up their shares in VW. Now when loans are called from Banks and Porsche has no money to pay, shares change hand, or possibly in this merger, give more shares to Banks so they can give more money to recapitalize Porsche so this deal with VW can go on.
A car maker acting like a silly investment bank, totally stupid.
|
>>There is a new holding company beeing made, where Porsche will me just another brand >> under the umbrella of all other VW brands, retaining some brand independence
That is what I thought would happen - and Porsche could have remained independent if they had not gone down this route. Next Porsche 911 will be based on the VW Beetle/Camper van platform if we're not careful :-)
|
|
Not sure this will happen. More likely Porsche and VW will have a cooling off period. Remember Porsche is still a family owned company.
|
Remember Porsche is still a family owned company.
Not disagreeing. But don't forget Ferdinand Piech used to be in charge of VW and it is the Piech family that control Porsche.
It will all be simple or complicated to resolve ... ;-)
|
|
If VW does absorb Porsche, then handle the independence issue properly (as FIAT has done for many years with its subsidiary, Ferrari) Porsche might have a bright future after all.
|
|
|
|
