UPDATE 1-Wolfgang says Porsche won't be sold to VW-report

*Porsche supervisory head says Porsche not to be sold to VW
*First direct comments from Porsche before Wednesday meeting
*Decision over carmaker's ownership split on family lines

(adds Porsche comments that assets not to be sold to VW)
By Tyler Sitte
FRANKFURT, May 2 (Reuters) - Wolfgang Porsche, head of the
supervisory board of Porsche and patriarch of one of its two
controlling families, said the carmaker will not be sold to
Volkswagen .
Media reports have said the Porsche and Piech families are
set to make a decision on Wednesday over a possible sale of
Porsche AG to Europe's largest automaker. They are trying to
find ways to reduce the huge debt of Porsche's holding company.
"We are currently on the right path. Porsche AG will not be
sold to Volkswagen," Porsche told the Frankfurt Allgemeine
Sonntagszeitung (FAS) in an article to be published on Sunday.
The statement from the head of the Porsche clan appears to
put him on a crash course with his cousin Ferdinand Piech, who
advocates a sale of Porsche to VW.
According to articles in Spiegel and Wirtschaftswoche, Piech
backs the VW option that would effectively wipe clean the debts
of both the Piech and Porsche families, who control all the
votes in Porsche Automobil Holding SE .
In addition, Piech suggested Porsche should replace its
chief executive, Wendelin Wiedeking, and Chief Financial Officer
Holger Haerter with VW CEO Martin Winterkorn and VW CFO Hans
Dieter Poetsch.
Wirtschaftswoche said the sale could be worth around 11
billion euros.

TOUGH DECISION
Porsche Automobil, which has spent about 23 billion euros to
gain control of a nearly 51 percent stake in Volkswagen, has
said it plans to raise its VW voting stake to 75 percent as
early as this year should economic conditions allow.
At the end of January, Porsche had racked up debt of 16.2
billion euros, mostly stemming from its purchase of VW stock.
According to the FAS, Wolfgang Porsche has voiced support
for a plan proposed by Wiedeking in which Porsche and VW would
be merged under a new holding company that Wiedeking would then
run.
Sketching a similar scenario, Wirtschaftswoche said
Porsche's debt could be paid off through a capital increase and
the large shareholding families would have the finances at their
disposal to preserve Porsche's independence. The report did not
cite sources.
Wiedeking's plan would most likely see Porsche give up its
ambitions to raise its stake in VW to 75 percent in order to
secure profit-transfer and controlling agreements.
The rising cost of debt has caused Porsche to consider
alternative ways of raising money over the long term, including
selling assets, people familiar with the matter have told
Reuters.
The sources said the two families could sell assets other
than Porsche AG if Porsche Automobil needed additional funding.
(Reporting by Tyler Sitte; editing by Robert Woodward)
((tyler.sitte@thomsonreuters.com; +49 69 7565 1207; Reuters
Messaging: tyler.sitte.thomsoneuters.com@reuters.net))
Keywords: PORSCHE/SALE

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