Porsche billionaires are in a tight spot, again

PORSCHE AUTOMOBIL HOLDING SE sure knows how to do drama. Last week, the listed holding of the Porsche and Piech families warned it may have to book up to €22 billion ($23 billion) of impairments amid a decline in the market value of its 31.9% stake in Volkswagen AG and 12.5% economic interest in the Porsche AG automaker.

- CHRIS BRYANT

The write-downs were triggered by technical reasons related to its accounting and VW's restructuring, and the adjustments are non-cash. Nevertheless, Porsche SE investors should pay attention to VW's diminished capacity to pay dividends amid a bruising labour conflict over possible factory closures and the auto giant's deteriorating competitiveness in China.

Those dividends are important for the billionaire Porsches and Piechs, who borrowed heavily to acquire a 25% voting stake in Porsche AG's initial public offering in 2022 and need the cash to pay down the debt.

While Porsche SE's survival isn't imperiled like it was in 2008 when it tried and failed to acquire the much larger VW, the families are once again in a tight spot partly of their own making. But they're not backing down.