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Porsche Re-Applies for State Loan

After at the end of the last week German manufacturer Porsche was denied access to a state guaranteed loan, the company has today re-applied to state controlled KfW bank for the badly needed 1.75 billion euro.

Last week, the same KfW bank rejected Porsche's loan application, due to the fact that they did not meet the state's requirements, Bloomberg reported. The company has now improved their application, being more specific about what the money will be used for and how Porsche intends on repaying it.

"A KfW loan would be vital for Porsche. They'll do what they can to pull it in." Willi Diez, Germany's Institute for Automobile Industry head was quoted as saying by the aforementioned source.

On Friday, when Porsche received the bad news regarding their loan, the news was perceived as being "a huge psychological blow," as Gary Jenkins, Evolution Securities head of credit research said. "The whole world knows they need cash and it's not a good starting point for negotiations."

The rejection made now rival Volkswagen state that they may loan Porsche some money, should they ask for it. According to Hans Dieter Poetsch, Volkswagen's CFO, his company is considering lending a hand to Porsche, but only if the financial results of the second quarter will allow for the loan.

"If we give a loan, enough collateral needs to be there. Loans can only be given at an arm's length principle. There are no exceptions," he added when asked about a Porsche bailout.

An answer to Porsche's new application is expected sometimes this week, although it is unclear when exactly the committee will meet, Steffen Moritz, a spokesman for the economy ministry said.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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