Mon, Jun 22, 2009 page11

• Qatari interest leads to family drama at Porsche

  PIQUED PIECH: After Qatar sought a minority blocking stake in the famous German carmaker, Ferdinand Piech reportedly expressed strong opposition to the proposal

  • AFP
  • • 
    • 
    • 

  Qatar’s prime minister has unintentionally fueled a family feud among the owners of German luxury sports car maker Porsche, the future of which is threatened by a takeover bid for Volkswagen.

  Porsche confirmed recently that it was in exclusive talks with Qatar on investing in the heavily indebted maker of the 911 sports car.

  “We are still negotiating over the share to be acquired,” Qatari Prime Minister Sheikh Hamad bin Jassem al-Thani told reporters in Doha last week, adding that a deal could be concluded within three weeks.

  Qatar would like to acquire 25 percent plus one share of Porsche, a minority blocking stake that would give it a say in major decisions.

  OPPOSITION

  But some at Porsche, including key figures, are unhappy with that prospect, one being Ferdinand Piech, who wields considerable clout because his family is a major shareholder and he is head of the VW supervisory board.

  During a meeting last week of the Porsche and Piech families, which together own Porsche, Piech expressed strong opposition to taking Qatar on as an outside investor, and was backed by his cousin, Wolfgang Porsche.

  The news was reported in the media and confirmed by a source close to the matter but immediately denied by Porsche.

  The company said no meeting had taken place, and that both families “unanimously support” the arrival of an outside investor.

  Porsche is wholly owned by the descendants of founder Ferdinand Porsche, and while shares are traded on the stock exchange, their owners have no voting rights.

  A previous attempt to open the company up to Middle Eastern investors failed.

  In 1983, Piech’s brother Ernst sold his share to Kuwait, but the family immediately objected and bought the stake back, a Porsche spokesman said.

  Porsche is under pressure now however because it has accumulated 9 billion euros (US$12.5 billion) in debt and needs a credit of 1.75 billion euros that the German state-owned bank KfW has resisted granting.

  Porsche is not a direct victim of the economic crisis, the criteria established for access to public aid, but of its attempt to take over VW via complex stock options that backfired.

  Porsche owns 51 percent of the shares in Europe’s biggest auto manufacturer.

  The Porsche and Piech families appeared to have found a solution late last month when they acknowledged they could not raise their VW holding to 75 percent and agreed to a merger of the two companies.

  But subsequent talks quickly broke down.

  Tension is now so strong that Porsche boss Wendelin Wiedeking sent Piech a letter last month accusing Piech of harming the company’s interests with public criticism of Wiedeking, a spokesman said.

  But “it’s internal opposition among the family, between Ferdinand Piech and Wolfgang Porsche,” rather than a spat between Piech and Wiedeking, an industrial source told reporters.

  After Qatar sought a minority blocking stake in the German carmaker, Ferdinand Piech reportedly expressed strong opposition to the deal.

  TROUBLE WITH VW

  As a result, the climate has deteriorated between Porsche’s headquarters in Stuttgart, southern Germany, and VW in northern Wolfsburg. VW also did not appreciate being sidelined during the talks with Qatar.

  For Porsche it is an internal matter, but “you cannot treat VW like that,” a source close to the auto giant said.

  VW might decide not to extend a 700 million euro credit it has accorded Porsche.

  “It is getting more and more tense,” a union source said.

  Wiedeking wrote on June 9 to Berthold Huber, head of the IG Metall trade union, and threatened legal proceedings because Huber had publicly evoked “difficulties” at Porsche, spokesmen for the company and the union said.
• Most Popular

  • 1

    Typhoon could trigger sea warning, hit central Taiwan

  • 2

    Cancelations announced as sea warning issued for Typhoon Fung-wong

  • 3

    Fung-wong approaches Taiwan, batters Philippines

  • 4

    Volunteer soldiers seeking discharge rises from 2021

  • 5

    Jokic’s 55 point pays off for Nuggets