Porsche to apply for German gov't funding again

• Source: xinhua
• [08:59 June 23 2009]
• Comments

German luxury sports car maker Porsche will try again to apply for huge governmental funding after its failed bid to seize control of Volkswagen, it was revealed on Monday.

The German development bank KfW, which oversees anti-recession state loans, was reported last week to have turned down a request from Porsche for a loan of 1.75 billion euros (around $2.5 billion), saying the Stuttgart-based company would have to offer better terms.

"We are going to do so quickly," said a Porsche spokesman.

Porsche's debt tripled after the manufacturer raised its holding in Volkswagen AG to 50.8 percent at the start of this year. The carmaker now lacks the funds to exercise options for an additional 20 percent of Volkswagen stock, forcing Porsche to enter talks with Qatar about selling a stake to the Gulf state.

 German news agency DPA reported that KfW rejected Porsche's bid because it had no assurance that the money would not be used to seize control of Volkswagen.

Nor had Porsche explained how it planned to repay the grand total of 12.5 billion euros (around $17.4 billion) in loans it is seeking from all its banks, according to DPA.

Porsche ran up its debt in an ill-fated attempt to obtain three quarters of Volkswagen. The larger carmaker is now offering to unwind the debt in exchange for a takeover of Porsche AG.