By on November 25, 2009

Deep in the reds. Picture courtesy

When Wendelin Wiedeking fought the battle against Porsche being taken over by Volkswagen and himself sent to Siberia, his last bullet was a threat that the takeover by Volkswagen could cost €3b in additional taxes.

BS, we said, “there are ways to circumvent this nasty detail.” The best way to avoid taxes are losses. Actually, losses will get you a hefty tax refund. We were sure that VW’s CFO Hans Dieter Poetsch would know how to come up with hefty losses. Poetsch did not disappoint.

Porsche, which formerly had more profits than sales is “headed for a second consecutive annual loss in the billions of euros as the hangover lingers from a failed takeover of Volkswagen AG,” writes Reuters.

Without going into bookkeeping arcana, Porsche will stay deeply in the reds until it has been completely taken over by Volkswagen. And that despite increased sales forecasted, and savings in the high hundreds of millions of Euros in this year and the next, due to synergies with Volkswagen.

One arcane detail is too pretty to not to be mentioned: If VW’s home state of Lower Saxony once again gets the right to appoint two members to VW’s supervisory board at the next annual meeting, Porsche will have to book its VW stake at market value.

“This would give rise to a considerable loss based on the current market price,” Poetsch said, and it would only be partially offset by the considerable deconsolidation gain from the sale of nearly half in Porsche AG. Wonderful book losses “in the low single-digit billion euro range!”

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