Porsche reports loss of 4.4 billion euros

November 13, 2009 03:15:56 PM

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German luxury car maker Porsche on Thursday unveiled pre-tax losses of 4.4 billion euros (6.5 billion dollars) for its 2008-2009 financial year that it blamed on write-downs stemming from its stake in Volkswagen.

Porsche had made a profit of 8.6 billion euros in its previous fiscal period.

The company said the loss over the financial year, which ended in July, reflected its failed bid to take over Volkswagen, its far bigger German rival.

Porsche had taken cash settlement options on VW shares in hopes of acquiring Europe's top auto maker. Owners of such options receive the difference between the share's cash value and the price when the option is exercised.

But ultimately it was Volkswagen that announced plans last month to buy Porsche, after which Porsche had to sell some of the options to the Gulf emirate of Qatar, which will have a 17 percent stake in Volkswagen-Porsche.

It was the sale of these options that led to the write-downs.

Porsche had acquired the options from banks at a level largely above that of the stock market, which determined the price at the time of the sale.

-- Dow Jones Newswires contributed to this report --