Porsche SE, the family-controlled sports-car manufacturer, announced it has made a loss of €4.4 billion for the 2008/09 financial year.
In a statement released today the luxury carmaker highlighted its failed attempt to takeover Volkswagen as the reason for the massive losses. "The primary factor in the loss reported by Porsche SE was the write-down recognised for the cash settlement options to Volkswagen shares," it said. (Click here to read our coverage of Porsche attempting to takeover VW)
In attempting to takeover VW, Porsche amassed debts of aproximatly €10 billion and by exceeding the 50% share threshold, Porsche also took on VW's liabilities, tipping it from a €8.6 profit in 2007/8.
However, the Porsche holding company, Porsche AG still showed a double-digit margin in operating profit, according to the statement. "Therefore, Porsche remains the most profitable automobile manufacturer in the world," it continued.
Porsche and Volkswagen, which are controlled by rival branches of the same family, began merger talks in May after Porsche fell into financial trouble. Although the talks were fraught with difficulties, the two finally agreed VW would pay €3.3 billion for a 42% stake in Porsche. (Click here to read our ongoing coverage of the takeover saga)
Porsche is controlled by Wolfgang Porsche and originally envisioned his smaller company could takeover VW. Porsche began building shares in VW but the ambitious plans left Porsche needing the help of his cousin, Ferdinand Piech, head of VW, to his business. The merger is expected to be fully concluded by 2011.
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