9 billion euro debt ferocious, VW backing off Porsche

The "Big Mac" Alliance's water is now a dream. CFP the merger between the two cousins. Following the May 6 joint statement with Porsche that two companies will be merged, yesterday, foreign media reported that the public claimed to be unable to accept Porsche 9 billion euros of debt, before the Porsche announced the detailed debt situation, will not be able to talk about the merger with Porsche, another intention to become "the world's most powerful and most innovative auto alliance."　　Plan stranded. "The merger of the luxury-car brand Porsche and VW-branded Volkswagen has been and proved to be much more complex than it appears to be," Reuters commented on the deal. In fact, Winterkorn, the Volkswagen chief executive, warned the German carmaker when he was building a new factory in Tennessee, a major investor, that "if the merger with Porsche is not dealt with, VW will suffer a lot in the next six months on equity, debt and so on." "A 3 times-fold rise in debt over the past six months, the public has suspended the merger talks with Porsche because the latter has not explained how its debt has soared 3 times-fold in 6 months to its current 9 billion euros," he said. Ferdinand Piechy, chairman of the VW Board of Supervisors, said Porsche would have to disclose detailed debt and try to reduce its liabilities, otherwise the public would not be able to risk merging.　　The Volkswagen and the founder of the Porsche have urged two companies to merge, but after two weeks of the merger statement openly questioned the significance and feasibility of the merger for two companies, reflecting the merger case is not a reciprocal interest. Piëch's move is reminiscent of US investment company SANFORDC. Bernstein released a compelling report "in the next six months, Porsche will be forced to embark on a path that is contrary to its original purpose," said the analyst. "In the May 6 merger statement, Porsche hopes to maintain its independent capital operations, but in the future it will likely have to abandon the idea of including more than 51% of the company's holdings." "From a market point of view, Volkswagen's Thursday (German time) closing price on the German stock exchange is € 222 per share, and Bernstein is expected to fall to € 65 in the future." The report even mentions that the current mass market capitalisation is grossly overvalued, because "over the past 10 years, the public has invested in spending 40 times times the amount of their net profit."　　"Porsche out of the cards?"　　Porsche, for its part, has already shown that the company that first provoked the merger has no more cards.　　First, in terms of asset conditions, with the previous "snake-swallow-elephant" initiative, Porsche has borrowed more than € 9 billion in total debt, and from the number of VW shares it currently holds, it is not an absolute advantage or even sufficient to control the latter's decisions. Secondly, from the point of view of products, Volkswagen currently has 9 brands, and these 9 brands themselves in the market size, technical strength and other aspects have a big gap, Porsche joined, will become the brand. German Der Spiegel quoted one industry personage as saying, "Porsche will be very hard to endure this situation", at the same time, for the merged new company, "Volkswagen's current 9 brands are enough, in fact, GM is because of too many brands, mutual strife, the formation of waste of resources, causing a lot of problems. "In fact, in terms of the merger rules, it's not easy for VW CEO Winterkorn and Porsche CEO David Kim to agree on details including where the new company is headquartered and how to integrate the two companies ' technology and platform resources." The Porsche, aware of its debt-ridden obsession, is also seeking a private infusion of new capital, while talking to the public about the merger. "Porsche will seek a new capital of at least € 5 billion between 2009 and 2010, so the company will look for a foreign investor outside the Porsche and Piëch family, which is likely to be an Arab," Reuters quoted a source as saying. The infusion of new capital will change the share of the once-profitable family-controlled depot.　　"This reporter Lin Jinwen Porsche difficult asset situation as a result of the previous" Snake Swallow Elephant ", Porsche around the debt to increase the public stake, the current total debts of 9 billion euros.　　Product Angle Volkswagen has 9 brands, Porsche will become one of them after joining, no longer has a special status, and GM because the brand too much mutual strife and cause waste of resources. Consolidation rules how the new company integrates the technology and platform resources of two companies.