Porsche Chief steps down as VW prepares to take over

Stuttgart: Chief Executive of German carmaker Porsche AG, Wendelin Wiedeking resigned onThursday after losing a power struggle with Volkswagen, which is set to take over Porsche.

Porsche's supervisory board agreed on Wiedeking's departure after a night-long session, making him the first high-calibre victim of the drawn-out takeover battle between Porsche and Volkswagen AG.

Early on Thursday, the Porsche board approved a plan to raise € 5 billion ($7.1 billion) in Capital that could clear the way for a takeover of the highly indebted sports car maker by Volkswagen.

The board also gave the green light to efforts aimed at securing a deal worth up to € 5 billion with the Gulf state of Qatar to buy a 10 per cent to 25 per cent stake in Porsche. The carmaker's management was asked to prepare for creating an integrated company consisting of Porsche SE and Volkswagen AG.

In planning to take over Porsche step-by-step, Volkswagen turned the tables on Porsche, which has been forced to abandon a push to acquire VW. The Porsche and Piech families, Porsche SE's controlling shareholders, agreed to the takeover with Volkswagen to integrate the brand into the VW group.

Thursday's events came as a victory to Volkswagen Chief Executive Ferdinand Piech, who is also a shareholder in Porsche.

The developments came after Porsche wracked up debt of about € 10 billion in gaining a majority 51 per cent stake in VW, Europe's biggest carmaker.

Wiedeking, 56, who had been at Porsche's steering wheel since 1993, will be succeeded by Chief Production Executive, Michael Macht.

Porsche's Financial Chief, Holger Haerter is to leave the company as well.

Both Wiedeking and Haerter are stepping down immediately and also resigned their seats on the supervisory boards of Volkswagen and Audi AG, a subsidiary of the Volkswagen Group.

With their resignations, both Managers wanted to "make an important contribution to pacify the situation", Porsche said in a statement.

Wiedeking, whose contract was to expire in 2012, is to receive a € 50 million severance, half of which is to be donated to a charity, while Haerter is to be paid €12.5 million.