Porsche 2010 Annual Report Download - page 89

Liquidity risk
The Porsche SE group’s liquidity has de-
creased since 31 July 2010. This is attributable, in
particular, to the tax and interest paid in part in De-
cember in connection with the revised tax assess-
ments from the tax authorities relating to the final tax
treatment of the stock option transactions (for further
information on this point, we refer to our statements in
the section “Tax risk” in this risk report). Cash inflows
arose in particular from dividends paid by Porsche
Zwischenholding GmbH and the disposal of all of the
remaining cash-settled options relating to Volkswagen
AG shares as of 31 July 2010.
Porsche SE has a total loan facility of 8.5 billion
euro, of which 7.0 billion euro has currently been drawn.
All of Porsche SE’s shares in Volkswagen AG are used
as collateral for the loan. If a potential sale of the
pledged shares in Volkswagen AG does not satisfy the
banks, further collateral has been provided in the form
of a lien on the 50.1 percent shareholding in Porsche
Zwischenholding GmbH, as well as on the claims accru-
ing to Porsche SE in the event that the call or put option
relating to the 50.1 percent shareholding in Porsche
Zwischenholding GmbH is exercised. The 50.1 percent
shareholding in Porsche Zwischenholding GmbH has
been assigned to a trustee as collateral.
The cash and cash equivalents of Porsche SE
totaled 0.6 billion euro as of 31 December 2010. In
principle, Porsche SE additionally has at its disposal the
aforementioned, currently unused line of credit of 1.5
billion euro.
To secure liquidity beyond 30 June 2011 it
will be necessary for the planned capital increase of
Porsche SE to be performed by 30 May 2011, with
an issue volume of at least 2.5 billion euro. The com-
pany’s annual general meeting on 30 November 2010
decided on the corresponding capital measures. The
resolution for a capital increase was entered in the
commercial register on 13 January 2011. The pro-
ceeds from the capital increase must be used to
repay to the banks the first loan tranche of 2.5 billion
euro, which according to the conditions of the syndi-
cated loan falls due for payment on 30 June 2011.
The syndicated loan agreement stipulates that the
funds used to repay the first tranche may not stem
from the sale of Volkswagen AG shares or Porsche
Zwischenholding GmbH shares. The remaining funds
from the capital increase of up to 2.5 billion euro
must also be used to repay the liabilities from the
syndicated loan. If the timetable for the direct capital
increase is delayed, Porsche SE’s lending banks have
expressed their willingness to extend repayment of
the first tranche of the syndicated loan by up to four
months, in the event of certain legal obstacles to the
implementation of the capital increase. In the event
that the capital increase cannot be implemented or
implemented completely, the annual general meeting
of the company on 30 November 2010 approved
other measures for increasing capital (for further
details we refer to our statements in the section
“Capital measures planned by Porsche SE” in the
section “Significant events”). The second tranche of
the syndicated loan amounting to 4.5 billion euro and
the currently unused revolving loan fall due for pay-
ment on 31 December 2011. The company can,
under certain circumstance, request that the maturity
date be postponed until 31 December 2012.
As part of the overall concept of the basic
agreement, the holders of ordinary shares of Porsche
SE who are deemed part of the Porsche and Piëch
families have undertaken, subject to certain condi-
tions, to ensure that the new ordinary shares issued
as part of the capital increase adopted on 30 Novem-
ber 2010, are subscribed for at an estimated total
subscription price of 2.5 billion euro. These condi-
tions stipulate that Porsche SE must not be insolvent
or illiquid, nor should there be a threat of insolvency
or illiquidity, nor should there be an event of default
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