Projo Cars Blog

STUTTGART - Sportscar maker Porsche conceded a months-long power struggle to mass-market rival Volkswagen by axing its CEO and said it would raise at least $7.1 billion in equity as the two prepared for a merger, according to Reuters.

Porsche said Wendelin Wiedeking, Germany's best-paid executive and its CEO for the past 16 years, and finance chief Holger Haerter would quit the group immediately.

Before Wiedeking's departure, the Piech and Porsche families which control Porsche approved his proposal to raise fresh equity -- either in cash or through a contribution in kind -- and endorsed talks to sell a stake to Qatar.

"This should lay the foundations for the creation of an integrated automobile group consisting of Porsche SE and Volkswagen," Porsche said.

The families had been at loggerheads for months over how to resolve Porsche's debt woes and the role VW would play. VW chairman Ferdinand Piech has pushed for VW to take over Porsche, on condition that Porsche fixes its finances first.

Porsche SE, the holding company that controls sportscar maker Porsche AG, needs to bolster its finances after accumulating more than $14 billion in debt through its botched attempt to seize control of VW.

 Tags  Porsche VW

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