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Porsche announces capital boost to create group with VW
2009-07-22
FRANKFURT (AFP) - German sports car maker Porsche announced early Thursday that it would seek a boost in capital of at least five billion euros to create an integrated group with Volkswagen. The decision was taken at a meeting of the supervisory committee held Wednesday in Weissach near Stuttgart in southwestern Germany, one day ahead of schedule, in a bid to seal a historic alliance with Volkswagen. "The basis for the creation of an integrated group between Porsche SE and Volkswagen AG has thus been laid," the builder of the 911 sports car said in a brief statement. Porsche, which owns about 51 percent of Volkswagen, did not say who would take part in the raising of capital that would give it new liquidity to allow it to pay off, at least partially, its roughly 10 billion euros (14.2 billion dollars) in debt. The main shareholders in both Porsche and VW, the Porsche and Piech families, were due to examine two competing offers at a meeting Thursday. The first offer was designed by the Porsche management and its contested boss Wendelin Wiedeking. That proposal calls for the Gulf state of Qatar to take a major stake in Porsche and to buy VW stock options owned by Porsche. The second offer comes from VW, which would buy Porsche's core automaking activities, making it VW's 10th brand, with Qatar possibly investing in the integrated company. In either case, the decision belongs to the Porsche and Piech families.
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