PORSCHE IS in advanced talks about selling a large equity stake to the Gulf state of Qatar in a move that could ease the German sports car-maker’s financial pain and turn the tables in its feud with larger rival Volkswagen.

Wendelin Wiedeking, Porsche’s chief executive, is talking to the Qatar Investment Authority (QIA) about taking a stake of up to 25 per cent in the sports car-maker’s holding company, according to people familiar with the negotiations.

QIA is combing through Porsche’s books and a deal could be announced within weeks, these people said.

A possible deal would considerably strengthen Porsche’s clout in the continuing merger talks with Volkswagen, and it could potentially put the company back in the driving seat in the saga surrounding Europe’s largest car-maker.

It would also call into question the ambitions of Ferdinand Piëch, Volkswagen’s chairman, to stay at the helm of a combined group.

The feuding Piëch and Porsche families last month agreed in principle to merge the two car-makers and integrate Porsche as the 10th marque alongside VW, Audi, Bentley and other brands.

This came after Porsche was forced to suspend its attempt to control Volkswagen fully as the purchase of more than 50 per cent of the car-maker’s shares left it with a more than €9 billion debt load.

Volkswagen yesterday said it would support an investment of Qatar.

“In principle we view this positively since it would accelerate the process to form an integrated group with 10 brands,” the company said.

Porsche declined to comment on talks with possible investors. – (Copyright The Financial Times Limited 2009)