Porsche, Volkswagen reaffirm merger goal image

The squabbling cousins who run Porsche and Volkswagen appeared to bury the hatchet on Tuesday, agreeing to work together once more towards a combination of the two German carmakers.
Porsche Chairman Wolfgang Porsche and Volkswagen Chairman Ferdinand Piech put out identical statements saying an integrated automotive group remained their goal despite days of frosty stonewalling by VW’s leader — who is also a member of the family that controls Porsche.

“Both companies will advance efforts towards this goal in a constructive way and in mutual agreement with all the parties concerned,” the two-sentence statement said.

The sudden thawing of relations came as Porsche cast a wide net in search of political and financial allies for its struggle to bolster its finances and revive the merger talks.
Volkswagen’s powerful labour leader, Bernd Osterloh, said he was prepared to resume talks only if the extended family that controls Porsche makes clear its intentions.
Porsche, which holds nearly 51 percent of VW’s voting stock, has been forced to scale down an attempt to seize full control of Europe’s biggest carmaker and instead seek a merger whose details are supposed to be worked out by early June.

Porsche’s 9 billion euros ($12.27 billion) in net debt built up for a VW takeover before car markets collapsed have made its finances a focal point of attempts to strike a deal.
Porsche in March tried to drum up 12.5 billion euros in loans to refinance its debt, but only managed to get 10 billion. Its lenders have committed only about 750 million euros of the extra 2.5 billion in loans it seeks, a banker familiar with the deal said.
A spokesman for the company said Porsche was “well on its way” to getting the additional loan.
Porsche was supposed to get its first debt rating by the end of this month, but these efforts are now on hold.
That move potentially delays efforts to shed light on its finances and increases its cost of borrowing.