Porsche Asks German Government for 1,75 Billion Euro Loan

By Henny Hemmes
Senior European Editor

Amstrerdam Bureau
The Auto Channel

THE HAGUE, June 4, 2009. Wednesday, sports car manufacturer Porsche confirmed that it has asked the German government for a 1.85b euro (approx. $ 2.5b) loan. The money could come from the state program of some 100 billion euro to help companies through the financial crisis and be provided by the state bank KfW. Porsche has the intention to pay back the loan with interest, but said that it has no guarantee yet that the loan will be released. The company is also talking to other banks.

Last March, Porsche tried to lend 12.5b euro to finance its debts, but could not get more than 10b. Later it got an extra 750 million from a Japanese bank and last week, Porsche could lend another 750m from Volkswagen.

The huge debt, accrued in the last couple of months, can be linked to the failed take over of VW. By acquiring 51 percent of Volkswagen AG, the debt rose to 9b euro (approx $ 12b), leaving the company with more than 2.5 billion euro ($ 3.5b) cash shortage. Porsche dropped its plans to get another 25 percent in VW.