Word: stakings
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...much for the theory. As Porsche has acquired ever larger blocks of VW shares - this January its stake passed 50% - VW's strong labor unions have grown increasingly alarmed at the prospect of being subjected to Porsche management, especially as Wiedeking has a reputation for toughness. To Wolfgang Porsche and Wiedeking's surprise, Piech has sided increasingly openly with VW's unions in bad-mouthing and openly opposing Wiedeking. Behind the scenes, other members of the Porsche family have tried, with limited success, to calm things...
...feuding has now escalated to a brawl, as Piech has pounced on an unexpected weakness in Porsche's acquisition strategy. Wiedeking and Porsche CFO Holger Härter have been amassing the VW stake through a sophisticated options-trading strategy that has provided the company with massive profits over the past three years, as well as giving them ownership of VW. But it has also ballooned Porsche's debt to $12.5 billion. Under normal circumstances, Porsche would have no trouble financing that debt - its VW stake alone is worth about $50 billion - but in the current economic crisis, even...
Complicating matters, Porsche has amassed additional options that would take its stake in VW to about 75%, but it's unclear how it would finance those extra purchases. Auto industry sources and financial analysts are buzzing about whether Porsche somehow locked itself into a contract that obliges it to buy that additional stake. Porsche won't say; from the beginning it has refused to reveal all but the scantest details of its hedging strategy. (Watch a video about an optimistic Dodge dealer...
Wiedeking still has some trump cards up his sleeve, the biggest of which would be to sell some of the VW shares Porsche has amassed to pay down the debt. But people who know the companies well say that something much bigger is at stake here than just paying off debt. "It's just like any family feud, where the arguments drag on and on for no logical reason, and just when you think that you have it sorted out, it flares up again," says Peter Schmidt, who runs a British-based consultancy called Automotive Industry Data. Already, he worries...
...expansion but will convert a substantial portion of its loans into equity. The Hong Kong government has already been the major financial driver, spending some $418 million on the park and another $1.8 billion on roads, sewers and a rail line to access it. Now, the government's majority stake will remain, but it will drop to 52%, from 57%. "Hong Kong Disneyland needs time to clean up its teething problems. Then profit will come," says Jeffrey Lam, a member of Hong Kong's Legislative Council...