You know how the endless parade of talking heads constantly bemoans the “freezing up” of global credit markets? They’re full of it. Credit markets are just fine. Just as long as you happen to be one of the world’s most profitable automakers. According to Bloomberg, Porsche Holdings has secured a €10B (with options to expand to €12B) refinance of a credit facility from a consortium of 15 banks including Barclays, Deutsche Bank, UBS and Credit Suisse. The refinancing was for cash borrowed by Porsche to buy its majority position in Volkswagen. Porsche is seeking another €2.5B in order to up its VW stake to the 75 percent level it needs to bring VW cashflow onto its books. And though lending to Europe’s largest automaker seems like a relatively safe investment for panicky banks, Porsche has been living by the sword from a financial standpoint. “The renewal of the credit line is a relief for short- term funding concerns,” says one Credit Suisse analyst who recommends that Porsche merely maintain its current investment in VW.
Didn’t they just hand a bunch of people their collective a$$es with the VW option squeeze a couple of months ago? THAT should have funded any sort of VW takeover. Something doesn’t match here.
My only hope is that in ten years can we look back and say “Yes, they really were financial geniuses.”
In another entry, it was pointed out that Porsche has been fined in the USA every year since 1991 for not meeting the corporate fuel economy requirement. Must be as bad or worse in Euroland. Don’t they need VW/Audi to dilute their bad mileage/high CO2 emissions vehicle mix?