Porsche rejects Volkswagen ‘ultimatum’

Porsche rejects Volkswagen 'ultimatum'
Photo: DPA
German sports car maker Porsche rejected Saturday an "ultimatum" issued by Volkswagen to accept by Monday a proposal for cross-ownership leading eventually to a merger.

However Wolfgang Porsche, head of the company’s supervisory board, said he was willing to discuss the proposal in private “and not in newspaper headlines.”

His statement followed a report to appear in weekly Der Spiegel that VW had given the Porsche board until Monday to agree to the scheme drawn up by Volkswagen boss Martin Winterkorn, the German state of Lower Saxony, which has a stake in VW, and Porsche co-owner Ferdinand Piech.

“We will not be held to ransom, it helps no one,” Wolfgang Porsche retorted in a statement.

Porsche currently holds 51 percent of Volkswagen, where Piech is head of the supervisory board, while ownership of Porsche is concentrated in a holding divided between the Porsche and Piech families.

According to Der Spiegel, under the proposed scheme VW would take over 49.9 percent of Porsche, with the remainder staying in the hands of the Porsche holding.

Ultimately, the Porsche and Piech families would have more than 40 percent of the merged company, Lower Saxony 20 percent, the Gulf state of Qatar, which is currently in talks with Porsche, 15 percent and an unspecified other state fund five percent.

“We greatly hope that the authors of this ultimatum will support the common aim … and put forward their propositions in internal discussions and not through newspaper headlines,” Wolfgang Porsche said. “We are prepared for that at any time.”

If Wolfgang Porsche and chief executive Wendelin Widekind reject the plan, heavily-indebted Porsche can expect to see VW demand the reimbursement of a €700-million loan it provided in March, Der Spiegel said.

Porsche accumulated some €9 billion ($12.6 billion) in debt trying to increase its VW holding to 75 percent. It asked the German government for a credit of €1.75 billion, but officials have declined to approve the request.

Qatar has said it is interested in a direct stake in Porsche, though another option would be for the Gulf state to buy options in Volkswagen shares held by Porsche.

According to another German weekly, Focus, Qatar said this week that a deal with Porsche depended on Porsche working things out with Volkswagen.

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