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Wolfgang says Porsche won't be sold to VW: report
2009-05-03
FRANKFURT (Reuters) - Wolfgang Porsche, head of the supervisory board of Porsche and patriarch of one of its two controlling families, said the carmaker will not be sold to Volkswagen (VOWG.DE). Media reports have said the Porsche and Piech families are set to make a decision on Wednesday over a possible sale of Porsche AG to Europe's largest automaker. They are trying to find ways to reduce the huge debt of Porsche's holding company. "We are currently on the right path. Porsche AG will not be sold to Volkswagen," Porsche told the Frankfurt Allgemeine Sonntagszeitung (FAS) in an article to be published on Sunday. The statement from the head of the Porsche clan appears to put him on a crash course with his cousin Ferdinand Piech, who advocates a sale of Porsche to VW. According to articles in Spiegel and Wirtschaftswoche, Piech backs the VW option that would effectively wipe clean the debts of both the Piech and Porsche families, who control all the votes in Porsche Automobil Holding SE (PSHG_p.DE). In addition, Piech suggested Porsche should replace its chief executive, Wendelin Wiedeking, and Chief Financial Officer Holger Haerter with VW CEO Martin Winterkorn and VW CFO Hans Dieter Poetsch. Wirtschaftswoche said the sale could be worth around 11 billion euros. TOUGH DECISION Porsche Automobil, which has spent about 23 billion euros to gain control of a nearly 51 percent stake in Volkswagen, has said it plans to raise its VW voting stake to 75 percent as early as this year should economic conditions allow. At the end of January, Porsche had racked up debt of 16.2 billion euros, mostly stemming from its purchase of VW stock. According to the FAS, Wolfgang Porsche has voiced support for a plan proposed by Wiedeking in which Porsche and VW would be merged under a new holding company that Wiedeking would then run. Sketching a similar scenario, Wirtschaftswoche said Porsche's debt could be paid off through a capital increase and the large shareholding families would have the finances at their disposal to preserve Porsche's independence. The report did not cite sources. Wiedeking's plan would most likely see Porsche give up its ambitions to raise its stake in VW to 75 percent in order to secure profit-transfer and controlling agreements. The rising cost of debt has caused Porsche to consider alternative ways of raising money over the long term, including selling assets, people familiar with the matter have told Reuters. The sources said the two families could sell assets other than Porsche AG if Porsche Automobil needed additional funding. (Reporting by Tyler Sitte; editing by Robert Woodward)
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