Porsche Says Getting Closer To Qatar Decision

FRANKFURT (Dow Jones)--Porsche Automobile Holding SE said Friday that Qatar, which is considering a capital injection into the German automaker, has completed its due-diligence process and that the result was positive.

“The talks with Qatar have reached the final stretch,” Porsche spokesman Albrecht Bamler said. He declined to elaborate on a timeframe for a final decision.

Porsche is in talks with Qatar over a capital injection as the company’s net debt tripled to EUR9 billion after it built a majority shareholding in Volkswagen AG (VOW.XE). Porsche holds a stake of just below 51% in Europe’s largest automaker by sales, plus stock options of around 20% to hike its stake further.

It remains unclear, however, if Qatar would take a stake in the family owned company directly, take over some of Porsche’s options to hike its Volkswagen stake, or a combination of both.

Asked whether reports were true that the deal with Qatar is close to turning sour, Bamler said that “we have a different impression.”

A person close to the talks said only some smaller details have to be worked out between Porsche and Qatar, adding that a decision could be made within the next two weeks if no obstacles arise.

The injection, if made, would come through the Qatar Investment Authority, a state-backed investment entity. A spokesman for QIA declined to comment on the current status of the talks or a possible timeframe for a decision.

In March, Qatar’s emir, Sheikh Hamad bin Khalifa al-Thani, told German weekly Spiegel that “we will certainly invest in the German automotive sector,” adding that it was just a question of finding the right time and the right price.

Daimler AG (DAI) Chief Executive Dieter Zetsche said in an advanced report by weekly Welt am Sonntag to be published Sunday that the German automaker isn’t interested in taking a stake in Porsche, dismissing a report by monthly Manager Magazin published last week.

Zetsche said Porsche has close ties with Volkswagen, referring to several joint projects. “It doesn’t seem sensible to me to think about replacing this integration with another one,” Zetsche is cited as saying.

Clinching a deal with Qatar is crucial for Porsche to shore up its balance sheet and strengthen its position in future talks with Volkswagen.

Volkswagen’s powerful supervisory board chairman and former CEO Ferdinand Piech, who at the same time belongs to Porsche’s owner family, said last month at one of his rare public appearances that he favors a sale of Porsche’s core sportscar operations to Volkswagen and an integration as the Wolfsburg-based company’s tenth brand.

Piech’s controversial remarks cast doubts about the future of Porsche CEO Wendelin Wiedeking and Chief Financial Officer Holger Haerter, triggering a slew of media reports about their imminent departure, which were fiercely rejected by Porsche at the time.

Porsche had to abandon its plan to target a 75% stake at Volkswagen and gain access to the company’s cash reserves when credit markets dried up and cashflow at its core sportscar operations turned anemic as demand for luxury cars collapsed amid the economic downturn.

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