Porsche board agrees to seek a capital increase and supports talks with Qatar investment fund

Porsche board meets amid talk of takeover

STUTTGART, Germany — Porsche Automobil Holding SE’s supervisory board agreed early Thursday morning to seek a capital increase of at least €5 billion ($7.1 billion), and threw its weight behind talks with a Qatar investment fund, a spokesman said.

Porsche spokesman Albrecht Bamler said the decisions came after a special meeting that started late Wednesday — a day earlier than Porsche SE — which owns Porsche AG and a 51 percent stake in Volkswagen — had originally planned an extraordinary meeting to talk about the future of both of the companies.

The talks with Qatar have been ongoing, and Bamler said the supervisory board agreed to give the go-ahead for Porsche to sign a deal with the fund. He refused further details, and would not say whether the €5 billion capital increase would come from Qatar, or if it was in addition to what was being sought from the fund.

Rumors have been swirling about a possible takeover by Volkswagen AG, and the board of Volkswagen also planned a separate meeting later Thursday.

Neither Porsche nor VW have commented about Thursday’s meetings, but one key issue is the independence of Porsche and the future of its chief executive, Wendelin Wiedeking. He is credited with turning around the automaker in the 1990s but now weighed down by a costly attempt to acquire more shares of VW just as the global financial crisis hit, curbing sales of new cars.

German media have widely reported that he is expected to step down. Porsche has dismissed the speculation.

At stake is also who will control what would be Germany’s most powerful automaker — Volkswagen or Porsche.

Porsche has built up a 51 percent stake of VW, Europe’s biggest automaker, and said in the recent past it wanted to acquire 75 percent, though that it wouldn’t be able to do so in the near future because of the state of the economy, car markets and presumably Porsche’s debt load.

Porsche is grappling with some €9 billion ($12.77 billion) in debt it accumulated while building up its Volkswagen stake.

Volkswagen AG, Europe’s biggest car maker by sales, is chaired by Ferdinand Piech, the co-owner of Porsche SE. In a reversal of fortune, it is now proposing a deal that would see it take around a 49 percent of Porsche and fold the lucrative luxury-car business into its portfolio, widening its range as signs point to a renewal in the luxury market.