Porsche Expects Smaller Loss; Says Merger With VW On Track

Porsche Automobil Holding SE (PAH.XE) said Friday it expects a smaller loss in fiscal 2010 than previously anticipated and that it is on track for the merger with Volkswagen AG (VOW.XE), with the related capital increase planned in the first half of 2011.

Porsche expects a loss of "less than EUR1 billion" in the current fiscal year, the Stuttgart-based company said in a statement. Porsche's fiscal year ends July 31.

The company previously forecasted a loss in the low single-digit billion-euro range, partly due to accounting effects related to its 50.7% stake in Volkswagen.

Volkswagen in December acquired a 49.9% stake in Porsche's core sports car operations through a capital increase as part of the complex merger, which is expected to be finalized in 2011. Porsche pocketed EUR3.9 billion from Volkswagen's investment in the company, which it used mainly to redeem bank liabilities.

Porsche said its net debt stood at EUR6 billion on April 30.

-By Christoph Rauwald, Dow Jones Newswires; [phone]; [e-mail]