Porsche 2012 Annual Report Download - page 116

In connection with existing liabilities, there is
generally the risk that Porsche SE is not in a posi-
tion to repay these when they fall due. Consider-
ing the financial situation of the company, the
executive board assesses this risk as currently not
relevant.
The cash and cash equivalents of the
Porsche SE group totaled 2.9 billion euro as of
31 December 2012. In principle, Porsche SE addi-
tionally has at its disposal the aforementioned,
currently undrawn, line of credit of 1.0 billion euro.
Risks originating from financial covenants
Porsche SE and various banks agreed on financial
covenants that must be complied with in connec-
tion with the new syndicated loan concluded in
October 2011. They relate to an earnings indicator
of Volkswagen AG and to the value of the shares
in Volkswagen pledged by Porsche SE and there-
fore cannot be directly influenced by Porsche SE.
During the fiscal year 2012 and as of 31 Decem-
ber 2012, the financial covenants were complied
with. The clauses of the syndicated loan agree-
ment provide for four dates per year on which the
two financial covenants must be simultaneously
checked and complied with. The loan agreement
is deemed to have been infringed only if the two
financial covenants are breached at the same
time. In that case, the banking syndicate is enti-
tled to terminate the syndicated loan. Under
certain circumstances, this would give rise to a
short-term refinancing requirement at Porsche SE.
The reduction of the syndicated loan from a
total of up to 3.5 billion euro to a maximum of 1.0
billion euro in the fiscal year 2012 has had a posi-
tive effect on the financial covenants agreed be-
tween Porsche SE and various lenders. These still
have to be complied with, even if the 1.0 billion
euro line of credit available to Porsche SE has not
currently been drawn. Compliance with the cove-
nants is continuously monitored.
The executive board continues to see no indica-
tion that these covenants will not be met in the
future.
Valuation risk
The share in Porsche’s business operations, and
thus in the Porsche Holding Stuttgart GmbH group,
was a major part of the contribution of the holding
business operations of Porsche SE to Volkswagen
AG. Following the execution of the contribution,
potential risks arising from the impairment of this
share will no longer affect Porsche SE directly, but
only indirectly via the investment in Volkswagen
AG. Accordingly, the regular valuations performed
by Porsche SE and monitoring of assessments
made by analysts for early detection of a possible
impairment pertain only to the investment in
Volkswagen AG.
2The company
Group management report
2112