Porsche Nears Deal With Qatar Amid Volkswagen Merger Talks

[Blue_Tires]

Source: WSJ.com

FRANKFURT (Dow Jones)--Porsche Automobil Holding SE (PAH3.XE) is nearing a strategic investment deal with Qatar Investment Authority, a move that would shore up its balance sheet and strengthen its position in talks with Volkswagen AG (VOW.XE) over ironing out a plan for a combined company.

A Porsche spokesman said Tuesday that the Stuttgart-based sports car maker has entered "exclusive talks" with the Qatar state investment fund after it previously had stated that negotiations with potential investors were progressing well.

He declined to elaborate on a specific goal of the talks with QIA. Porsche said some weeks ago it had been in talks with other parties, but didn't provide further details.

A spokesman for QIA declined to comment.

Porsche is under pressure because its net debt tripled to EUR9 billion after it raised its stake in Volkswagen to almost 51% in January and cash flows at its core sports car operations turned anemic as demand for luxury cars collapsed amid the economic downturn.

Porsche has been forced to abandon its push for a 75% stake in Volkswagen, Europe's largest automaker by sales. That would have given Porsche full control of Volkswagen and access to the Wolfsburg-based automaker's cash reserves.



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