Porsche facing $3.5b cash shortfall, narrowly avoided bankruptcy
Porsche has been trying to obtain a majority stake in Volkswagen for some time now, but it looks as though that quest has pushed the German sports car maker to the brink. Porsche has now racked up more than $12 billion in debt and was reportedly close to filing for bankruptcy in March.
According to Germany's Der Spiegel magazine, Porsche nearly filed for bankruptcy back in March and was only saved by a $978 million cash infusion from Volkswagen. Despite that loan, Porsche still requires another $3.5 billion just to meet its operation requirements.
According to The Local Porsche has asked the German government for $140 million in emergency loans, but the German government is reluctant to move forward with the funding. Moreover, even if Porsche lands the loans from the German government, it will only be a fraction of what the German automaker needs to keep the doors open.
Porsche's true financial health remains a bit of a mystery at this point, but it sounds as if Porsche's management may have bitten off a little more than it could chew with the VW deal. Porsche says it's still interested in taking control of VW but all talks will be on hold until the company can shore up its financial standing.