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Go Auto Article

http://www.goauto.com.au/mellor/mell...2575EC000AD2CC

Qatar bids for Porsche stake

Middle East offer to buy into Porsche confirmed as Germany rejects loan application

By DAVID HASSALL 7 July 2009

THE Middle East state of Qatar has formally made an offer to buy into Porsche and help reduce the sportscar-maker's troublesome €9 billion ($A15.8bn) debt as falling sales of the 911 raise the prospect of further production cuts later this year.

The proposed Qatar investment took on even greater significance on Wednesday when the state-owned KfW bank in Germany rejected a request from Porsche for a €1.75 billion ($A3.05b) loan to relieve its mounting financial pressure.

A Porsche spokesman confirmed that talks with Qatar had “entered the final stretch”, but reports from Germany suggest they are being complicated by a stand-off between Porsche and Volkswagen, in which Porsche holds 51 per cent of the voting rights.

“We received an offer from the Qatar Investment Authority concerning an investment in Porsche SE and the purchase of options in Volkswagen AG stock,” said the spokesman.

Porsche's mountain of debt forced it to abandon a complete takeover of VW and talks to merge the two companies froze.

Porsche announced earlier this year moves to slash 911 production at its famed Zuffenhausen plant in Stuttgart, but is now considering further down days in December unless sales pick-up considerably in the coming months.

Introduction of the four-door Panamera, which is built alongside the Cayenne SUV at Porsche's plant in Leipzig, has helped to maintain production levels at the Austrian plant.

Porsche has been harshly affected by the economic downturn, particularly in the United States – its largest single market – with global sales down 28 per cent this year to 53,635 vehicles.