Porsche courts Qatar

Luxury Automotive

The QATAR Investment Authority is a step closer to taking a stake in the holding company of iconic German sportscar maker Porsche.

Credit Suisse have been appointed to advise Youssef Kamal, Qatar’s finance minister, and completed preliminary examinations last week.

This is the latest in the boardroom tussle to wrest the controlling stake of Volkswagen Group, owners of luxury brands Audi, Bentley, Bugatti, Lamborghini as well as Seat, Skoda and Volkswagen.

The year long drive to purchase VW shares has saddled Porsche with huge, but currently serviceable, debt. The Gulf state of Qatar will strike a deal with Porsche by mid-June that will help the German sports car maker to pay down this debt pile.

The Financial Times revealed last month that Wendelin Wiedeking was talking to several Middle East funds – some from Abu Dhabi and Qatar – about a taking a stake of up to 25 per cent in the carmaker.

But according to reports in German weekly magazine Focus, Mr Wiedeking has worked out two possible options for an agreement with Qatar.

The first idea the carmaker is pursuing is for Qatar to buy up Porsche’s options for 24 per cent of shares of Volkswagen via its fund the Qatar Investment Authority, giving Porsche much needed cash and Volkswagen a new major shareholder.

Another option would be for Qatar to buy a direct stake in Porsche Holding, which controls the company’s sports car business as well as its 51 per cent stake in Volkswagen.

The second option would be more complicated because it would require a capital increase as well as an extraordinary shareholders meeting, according to the magazine article.

Porsche has been in talks with Volkswagen, of which it owns more than 50 per cent, about a proposed merger.

In March, Porsche tried to drum up €12.5bn in fresh credit. It needed €10bn to refinance loans and sought an additional €2.5bn.

But it has only managed to secure €10.75bn so far and has now asked the German government for a €1.75bn loan via state bank KfW.