Porsche chief quits after takeover failure
- Source: Global Times
- [00:57 July 24 2009]
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Porsche chief Wendelin Wiedeking stepped down yesterday ahead of a probable tie-up between the luxury carmaker and European giant Volkswagen, as a caustic family feud appears to be nearing an end.
The dynastic Porsche and Piech families that own Porsche also agreed to wrap up landmark talks with Qatar on a stake in Porsche, and to raise another 5 billion euros ($7 billion) in fresh capital to pay down heavy debt.
The Gulf state, a key shareholder, will buy a 17 percent stake in Volkswagen, its chief executive Martin Winterkorn said yesterday.
“We are going on the principle that Qatar will take 17 percent of Volkswagen AG,” said Christian Wulff, regional premier of the German state of Lower Saxony, which owns 20 percent of the biggest European carmaker.
The information was immediately confirmed by Winterkorn after both emerged from an extraordinary meeting of the VW supervisory board in Stuttgart, southwestern Germany.
Qatar would thus become the third-largest shareholder in Volkswagen.
Qatar is also expected to invest in Porsche, which said overnight that it planned a capital increase of at least 5 billion euros ($7 billion).
Another statement said Wiedeking and financial director Holger Haerter would both resign “with immediate effect,” after the failure of their bold strategy to take over VW.
Their hasty exit will be sweetened by payoffs of 50 million ($71.15 million) and 12.5 million euros ($17.79 million), respectively.
Wiedeking, who had opposed selling Porsche to Volkswagen, which would have helped the company reduce the debt he had run up in a botched attempt to take over VW, will be succeeded by Porsche’s production head Michael Macht, the board said in a statement early yesterday.
VW supervisory board president Ferdinand Piech, who is also a major Porsche shareholder, now appears set to impose his vision of taking Porsche on as VW’s 10th brand.
Meanwhile, Porsche’s supervisory board was also set to examine another offer from VW, which would buy Porsche’s core automaking activities, with Qatar possibly investing in the integrated company.
Porsche abandoned in May a plan to take full control of VW and its hefty reserves of liquidity, and Porsche was forced to find other sources of financing. The German state of Lower Saxony, which owns 20 percent of VW and holds a veto over its strategic decisions, stood between Porsche and VW’s cash.
Lower Saxony regional premier Christian Wulff said, “Porsche will of course remain autonomous, with its headquarters in Stuttgart. We will work together to become the world’s No. 1 automobile maker.”
(Agencies)