Porsche debt balloons to over 10 bln eur - sources

By Hendrik Sackmann and Philipp Halstrick

STUTTGART/FRANKFURT (Reuters) - Sports car maker Porsche SE aims to use a capital increase and the sale of a stake to Qatar to cut its net debt that has ballooned to more than 10 billion euros ($14.05 billion), two sources close to Porsche told Reuters on Wednesday.

They said Qatar and the two families that control Porsche were poised to pump around 5 billion euros into the company via a capital injection, helping offset debts which have risen from 9 billion at the end of January.

Qatar would get voting shares in Porsche through the capital increase, while the families would receive voting shares as well as non-voting preferred shares in the company.

The capital hike plan is part of a concept drawn up by Porsche Chief Executive Wendelin Wiedeking to untangle the debt mess of Porsche and bolster its position in merger talks with Volkswagen after efforts to seize control the fellow Germancarmaker failed.

The plan also includes Qatar taking over Porsche's derivative contracts that control around 20 percent of Volkswagen's voting shares, the sources said.

The total package would provide around 10 billion euros in relief for Porsche's stretched balance sheet and reduce its net debt to a manageable level, the sources said.

But it remains unclear whether Ferdinand Piech, a co-owner of Porsche and chairman of Volkswagen, supports the plan. He has been pushing a rival idea for VW to buy a minority stake in Porsche's healthy Porsche AG sports car business.

Porsche labour leader Uwe Hueck demanded the owners keep the sports car business, citing Piech's vow to Porsche shareholders in 1993 that "as long as I live Porsche will stay independent".