Porsche is advancing towards a deal with Qatar to give the country a shareholding in Volkswagen, a compromise that will clear the way for the carmakers to merge, according to people involved in the talks. Porsche racked up ¤9bn ($12.7bn) of debt trying to swallow its much bigger rival Volkswagen before the financial crisis turned the tables and threatened to unravel the deal. The luxury carmaker then entered talks with Qatar about selling a stake in Porsche but — with Volkswagen now set to dominate the marriage to its debt-hobbled partner — Qatar’s interest has shifted to Volkswagen. Merger talks are on ice until Qatar decides whether or not to invest. In a bid to save the merger, Porsche is now prepared to surrender its right to buy about a fifth of Volkswagen’s voting shares, said sources with direct knowledge of the matter. Porsche already owns roughly 50 percent of VW stock. “This is the most likely option,” said one source with direct knowledge of the matter. “It looks as if Qatar will buy Volkswagen shares,” said a second. A person close to Porsche said that “all options are on the table”. Shares in Volkswagen pared gains sharply on the news and were trading up about 7 percent to roughly ¤240 at 1556GMT. Porsche’s stock was up 4.3 percent at ¤43.44. The carmaker’s alternatives for repairing its tattered balance sheet are dwindling after strong signals from Berlin that its request for state aid will be rejected. A planned capital increase to open its doors to Qatar’s sovereign wealth fund, the Qatar Investment Authority, had been expected to raise more than ¤4bn. http://thepeninsulaqatar.com/Display_news.asp?section=Local_News&subsection=Qatar+News&month=June2009&file=Local_News2009062521448.xml

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