Porsche is also financially dependent on VW after receivinga 700 million euro

Porsche is also financially dependent on VW after receivinga 700 million euro loan to help pay down its debt. Volkswagen is one of Porsche’s most important suppliers,delivering or assembling components for a third of all Porschecars, including the body and engine for the four-door Panameraand Cayenne offroader models. Porsche is heavily dependent on Volkswagen, making it hardfor the Stuttgart-based auto maker to walk away from a deal. “But ultimatelyany deal has to be supported by VW and Lower Saxony.” Lower Saxony, VW’s home state, is VW’s second-biggestshareholder with a blocking minority stake of around 20 percent. Qatar “could help Porsche avoid a bigger financial problem,”Credit Suisse analyst Arndt Ellinghorst said. Porsche’s chances of setting the terms of any deal arelooking slim. Wiedeking has so far failed to secure 1.75 billioneuros in loans it wants from commercial banks or from KFW, astate-controlled bank in Germany.

He is pinning his hopes on striking a deal with Qatar buthis plans may be scotched by Porsche’s owners and by VW’sability to set the terms of a deal. Struggling under the debt, Porsche was forced to abandonefforts to raise its VW stake to 75 percent and is now seekingto bolster its finances before negotiating a deal to form an”integrated” company with VW. Porsche, which owns 51 percent in VW, is seeking an outsideinvestor after amassing 9 billion euros ($12.62 billion) in debtduring a bungled attempt to dominate Volkswagen. A successful investment from Qatar could strengthen PorscheChief Executive Wendelin Wiedeking’s negotiating hand as hetries to strike a deal with VW. Without it Porsche will struggle to prop up its finances andmay have little choice but to succumb to a reverse takeover fromVW, Europe’s biggest carmaker.

A decision on Qatar’s entry may come even before key familymembers are set to gather at a Volkswagen (VOWG.DE) supervisoryboard meeting on July 15, and a day later for the centenarycelebrations at VW unit Audi (NSUG.DE), the people said Spokesmen for Porsche and VW declined to comment. (Reporting by David Ljunggren; editing by Rob Wilson) Bonds. By Edward Taylor and Alexander Huebner FRANKFURT, July 3 (Reuters) – Porsche’s (PSHG_p.DE)squabbling owners are set to discuss an investment by Qatar inthe next two weeks, a milestone which could change the dynamicsof a Porsche/Volkswagen merger, people close to the talks said. Flaherty he also said he had not seen any sign ofcontracting wages in Canada. We expectsome continuing growth in unemployment in Canada as well.Recovery from the recession will happen before the reduction inunemployment,” Flaherty told reporters on a conference callfrom Santiago, Chile. OTTAWA, July 3 (Reuters) – The jobless rate in Canada andthe United States will continue to rise, Finance Minister JimFlaherty said on Friday.