Qatar Investment Update

Andrew posted a link in one of his comments today to a Forbes.com article about the potential Qatar investment in Volkswagen. I was thinking the investment was going to be in Porsche, but it looks like Porsche would be selling up to 25% of it’s stake in VW to Qatar. Sorry VW owners, but I feel better about this one already.

Here’s the highlight paragraphs of the story:

On Wednesday, news that Qatar expects to reveal the outcome of talks on buying a stake in Porsche in two to three weeks raised questions on what other alternatives are there left for Porsche to get rid of its climbing $12.5 billion debt.

“We are still discussing the stake. According to the legal agreement between the two parties, neither of them is allowed to disclose any information about it before it is sealed,” The Gulf Times said, quoting Sheikh Hamad bin Jassem al-Thani from Reuters. [Source: Forbes.com]

I’m still hoping for a VW/Porsche merger. I’d love for Porsche to come out on top.

Here’s a link to the Forbes.com article if you want to indulge yourself: What Lies Ahead For Porsche?

Comments

  1. hope they will be silent partners,if it goes through.

  2. mitchell says:

    im assuming qatar is heavy into petrol products – or just oil itself.
    im surprised there hasnt been more joint ventures or partnerships between auto mfgrs and oil companies since they are inextricably linked.

  3. this still has a way to go before it can happen, but I think it’s a good thing

  4. I have to say, That is a relief. Although there are some VW`s i like and it has history, its not a specialty car producer like Porsche and who owns VW doesnt trouble me at all.

  5. I think I am reading the article a bit differently. To me it looks like the Qatari investors would either be buying a stake in Porsche (the parent company) or receive some stake that is convertible into Porsche/VW (the combined company). Maybe I’m reading it incorrectly though.
    I think Porsche still wants to go through with the purchase of 75% of VW but has too much debt to make that viable so they are looking for outside investors to fund the deal in exchange for equity in the combined company.

  6. If it’s good for porsche, I’m all for it.

  7. I think that’s accurate, Andrew, but they’re definitely playing with alot of smoke and mirrors at this point regarding the details of the deal

  8. I would agree rb. Tough to figure out exactly what’s going on.

  9. You know they are not letting all of the details get out to the public. All we know is that they may be involved. Probably won’t find out the real story until it is a done deal.

  10. Everything starts with partial ownership and then develops to full ownership. I don’t see VW as a cash cow that would satisfy Qatari financial needs. I think the bigger prize here is Porsche. VW is Porsche’s achilles heal and therefore the best entry point.

  11. well,no news is good news.haven’t heard anything lately.

  12. Their not talking about VW being the cash cow for Qatar, Russ, they’re talking about it being a cash cow for Porsche if they can get their hands on it. Porsche wants it because they can use the VW facilities for operational efficiencies and because if you have a “cash cow” like VW that generates positive cash flow on a regular basis quarter-in-quarter-out that gives Porsche the ability to spend freely in the areas of Research & Development. They probably have some ideas for the direction of VW I’m sure too.

  13. My argument is that the Qatari’s couldn’t care less about VW. I don’t know how proftiable VW is but it seems unlikely that it produces the margins that Qatar is interested in. The only way to access Porsche in the future would be to “tag” onto VW. Because 50+ percent of VW is owned by Porsche via various means, if Qatar were to buy some of that ownership (taking some of VW assets off Porsche), it would by default make Porsche vulnerable.

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