Porsche Barely Scrapes By Bankruptcy, Situation "Critical"

Forget Jack Baruth and his girlie Boxster. The whole Porsche company is quickly skidding out of control. Porsche, the company that supposedly has more money than Scrooge McDuck, the company where CEO Wendelin Wiedeking and his CFO Holger Härter supposedly take a daily dive into the money, was—hold on to anything stable—facing insolvency two months ago. This is what readers of the German magazine Der Spiegel will read on Monday. The Süddeutsche Zeitung has an advance copy.

According to the report, Porsche was out of funds between March 22 and March 24, 2009. An insolvency could only be averted, because Volkswagen graciously handed them a €700 million loan. Yes, the same Volkswagen Porsche was buying. That loan only had a term of six months. Porsche was then able to secure a €10 billion bank loan, but had to put the crown jewels of the Porsche family in hock. This triggered a family feud, and an offer from Volkswagen to take Porsche over instead, lovingly documented in the annals of TTAC. Now it turns out that the €10b loan was used to pay off a previous €10b loan – Porsche turns more and more into a dead beat that uses a credit card to pay of another credit card balance.

Porsche needs more money. Currently, another €2.5 billion are considered necessary. Porsche is in “a critical situation,” Wendelin Wiedeking told his supervisory board. Also, Wiedeking should talk to CFO Holger Härter more. Wiedeking told the baffled board that he “had not been informed about the precarious situation until a week before March 24.”

Instead of wallowing in money, Porsche is looking at a debt load of €9 billion. Talks about a merger of Porsche and Volkswagen were broken off last week, and then re-started, but the revived talks lack the necessary spirit and urgency. The obvious leak to Der Spiegel could re-focus the attention. And/or humiliate Wiedeking even more.