Porsche secures ten billion euros to buy VW shares

Porsche VW emblems

Porsche will use the loan to buy up the remaning share of VW it needs to control the company

By Alex Ricciuti
March 25, 2009 10:56 PM
Filed Under: Corporate/Financial, German, Porsche, Volkswagen

Porsche's takeover of VW is just about complete.

The Stuttgart-based company, Porsche Automobil Holding SE, has secured 10 billion euros in loans to buy the remaining shares in Volkswagen AG it needs to hold a controlling stake. The deal also allows Porsche to borrow an additional 2.5 billion euros if needed.

Porsche secured the line of credit from a consortium of 15 banks, which include Swiss banks UBS and Credit Suisse Group, Deutsche Bank, BNP Paribas and Barclays Capital.

Porsche has been buying up VW shares for almost 4 years now and by January of this year held 51 percent of the Wolfsburg-based automaker, the largest in Europe by sales volume.

Due to complicated rules for corporate governance in VW's charter, which require an 80 percent voting share to control the company, and the laws of the state of Lower Saxon, where VW is based, which state that a 75 percent share of the vote at a stockholder's meeting is required in order to exercise a controlling interest, a stakeholder would need 80 percent of VW to be in charge outright.

Porsche has secured the loan in order to raise its stake past the 75 percent mark. But the government of Lower Saxony still owns 20.1 percent of Volkswagen AG.

 

Source: detnews.com

Press Release (Click to expand)

Porsche secures ten billion credit line

Stuttgart. Porsche Automobil Holding SE, Stuttgart, finalized negotiations to secure a new credit facility of Euro ten billion to redeem a credit of the same size. The credit framework contract allows Porsche to extend the volume to Euro 12.5 billion in the forthcoming weeks. In the wake of the extremely difficult global economic environment and the turbulences in the bond market banks needed additional assessment, thus resulting in a need for extra time. In addition to that, the new consortium includes banks that so far not have been counterparts of Porsche with respect to credit lines.

The credit line will be guaranteed by a consortium of 15 banks including Barclays Capital, Commerzbank, LBBW, Deutsche Bank, UBS, Credit Suisse, Santander, BayernLB, BNP Paribas, Calyon, UniCredit/HVB, Helaba, Intesa, WestLB und DZ-Bank. Agreed at market conditions are two tranches of twelve month with the right of extending a tranche of Euro 6.7 billion for an additional year. Porsche intends to pay down the smaller tranche fast and aims for credit ratings the results of which should be available in may 2009.

 

Comments

gorgonzola
March 25, 2009 11:04 PM
good get rid of blandwaggon.

Renegade
March 25, 2009 11:13 PM
And then they will want to buy Opel, SAAB, Hummer and Volvo, they want to take over the world.

giga-games
March 25, 2009 11:16 PM
no, i wouldn't say,.their plan is to get 100%stake in vw and this will take long time I supose

Renegade
March 25, 2009 11:31 PM
Not that much when u make the profit Porsche makes.

janobr
March 26, 2009 12:33 AM
Opel, SAAB, Volvo i agree, definitely not hummer, VW/Porsche group, should not get involved with american manufactures, Mercedes already made that mistake once, we should just want back what was ours and leave the american rubbish to keep on pulling the American Economy down. I would also add companies like range rover and Jaguar to that list.

Renegade
March 26, 2009 4:16 PM
Trust me, idiots will buy Hummers with Porsche badges like fresh candy.

trspeed600
March 26, 2009 1:18 AM
Understand that by purchasing VW, they are also getting Audi, Bentley, Bugatti,Seat, Skoda, and Lamborghini in the deal. Porsche is only interested in securing their future parts distribution by contolling VW group. Their were several attemps in the past by other companies trying hostel takeovers of VW group. This would have been disasterous for Porsche as a small auto maker. Now through some genius manuvering on their part, Porsche controls their own destiny. It really is hard to fault them for making this move.

alex_w115
March 26, 2009 2:33 AM
Is this a move from Piech to get Winterkorn out?

nathandavid88
March 26, 2009 4:25 AM
I wouldn't think so, Piech was the one that put Winterkorn in charge by booting out his predecessor!

dimeNickel
March 26, 2009 5:31 AM
10bil loan in recession...they sure push the limits

isaacarus
March 26, 2009 9:07 AM
good luck getting lower saxony to sell their share, id say theyre feling pretty powerful right now essentially holding the "controlling" stake that porsche would do a lot to get hold of ;)

radmeister
March 26, 2009 5:41 PM
Doesn't lower saxony control only 21%? Porsche can aquire the rest of the shares owned by private parties or firms, then they would have 79%, It will happen, very soon Porsche will be the largest company in the world by market value, assets, and income. With their quarterly profits and asset backing they will be able to buy any other car manufacturer out there, or any other company, hell they could buy Exxon Mobil if they wanted to.


Edited by user on March 26, 2009 at 5:43 PM
catchmyshadow
March 26, 2009 12:43 PM
porsche is swimming in money even more soon

911fnatic
March 26, 2009 1:32 PM
10bil loan, the difference is Porsche know what they're doing, their debt is secure. Wiedeking is a very sharp man.

Prince_Ash
March 26, 2009 3:05 PM
its about time, id like to see porsche put in some higher quality into VW and come up with cheap cars that have porsche quality.

Joe_Limon
March 26, 2009 3:23 PM
like carpet rear seats?

radmeister
March 26, 2009 5:35 PM
Joe what on earth are you talking about? There are leather covered small pillows last time i checked for back seats in the 911, and you know what they may not be very comfortable but considering the size of the car it was the only way they could get a back seat in there where someone could actually sit. I've rented a mustang GT, i'm 6ft tall and not even a small asian child could sit behind me, in the 911 somebody could actually fit behind me, not a very big person, perhaps a petite girl. And that's the way i like it. Most people end up using the back seats in a 911 as extra trunk space anyways, the breeder that i got my dog from has a 9ff 911 and he sticks the big bags of dog food in the back bench.

Michael
March 26, 2009 4:01 PM
Joe, I don't know how VW cars for US market look like, but I can assure you the "Made in USA" cars sold in Europe are cheap compared to VW and the other two popular VW brands (Seat and Skoda) as far as materials, execution and technology are concerned. Still, there is a positive exception called Ford. Of course, only those models manufactured in Europe.

scratchy996
March 27, 2009 12:15 AM
Americans think they get the same cars as the Europeans , but they never wonder why the cars built for the US are so cheap compared to the ones built for the European market.

Renegade
March 27, 2009 2:54 AM
Because europeans are snob and like expensive things even that are overpriced.

Michael
March 27, 2009 3:43 AM
Most of Europeans look for quality. If someone thinks this is snobism, so be it. Look how successful are the American car companies making cars for non-snob Americans.

View Comment Rules

Add Comment

You are modifying your comment

Exisiting User

Username
Password
remember me

New Users

Username
Email
Password
Comment

Your account

username
password

Other links