German luxury sports car maker Porsche has acknowledged that it borrowed hundreds of millions of euro from Volkswagen and needs billions more.
A spokesman for Porsche confirmed a report in Der Spiegel magazine that it had secured a loan of €700m from VW, in which it holds a 51% stake. 'The loan expires at the end of September,' the spokesman said. 'Porsche is not on the verge of bankruptcy,' he added.
Porsche asked for the loan in March, the magazine said, as it struggles to raise cash to finance the huge mountain of debt it undertook when bidding to take over the much larger VW.
At the time, Porsche needed to raise €12.5 billion. The spokesman said it had €10 billion from the banks, leaving it needing around €1.75 billion after the €700m from VW is taken into account.
Porsche has found itself facing debts of €9 billion during its ambitious takeover bid for VW -- Europe's biggest car maker. After the bid failed, the two auto giants agreed on May 6 to begin merger talks, giving themselves four weeks to agree a tie-up. But negotiations have since foundered amid clashes between the bosses of the two firms.