Expectations for 700 million euros ($990 million) of annual savings from Volkswagen AG's (VOWG.DE) planned merger with Porsche SE (PSHG_p.DE) were very realistic, VW Chief Executive Martin Winterkorn said.
The comment -- made to media at an event late on Monday -- came after analysts said the target appeared to be too optimistic.
Porsche said last week it would sell a 42 percent stake in Porsche AG, its healthy sportscar business, to VW for 3.3 billion euros as part of a deal to integrate the two companies.
It also sold a package of cash-settled options on VW shares to the Gulf state of Qatar.
The deal came with a management reshuffle that saw the CEO and CFO of Porsche depart, radically changing the Stuttgart-based company's leadership. VW's top managers will from September onward also head up Porsche, in addition to their posts at VW.
Porsche's financial woes prevent Volkswagen from integrating the sports car maker immediately, VW's Chief Financial Officer Hans Dieter Poetsch said at the event, which was also attended by Porsche AG's new Chief Executive Michael Macht.
Poetsch had told a German newspaper over the weekend that the two companies might be able to accelerate the merger in a very optimistic scenario and if the economy and financial markets offered particularly favorable conditions.
Shares of Porsche were up 4.2 percent at 52.10 euros, while Volkswagen was down 2.0 percent at 168.32 euros. VW's preference shares were up 1.5 percent.
Volkswagen's planned capital increase, which will help the company preserve its credit rating, could take place as early as the first quarter of 2010, Poetsch said. VW currently has a rating of BBB+ at Fitch and of A3 at Moody's.
The costs of integrating Porsche could be amortized within four to five years, the CFO said. By 2011, Poetsch said he wants to bring Porsche's finances on to a solid footing.
Unwinding the package of VW options -- a prerequisite for Porsche's refinancing talks -- would have a net positive impact on Porsche SE, Poetsch said.
Porsche's financial woes, which it has said would lead to a pretax loss of about 5 billion euros for the fiscal year that ended on July 31, would not burden sportscar unit Porsche AG.
Macht said the unit posted double-digit return on sales for the year, even as unit sales dropped between 20 percent and 30 percent from a year earlier.
Macht said Porsche could boost annual unit sales to about 150,000 if the company decided to add a fifth model line, without elaborating further. Porsche sportscar unit sales were 100,000 in 2007/2008.
(Reporting by Hendrik Sackmann in Stuttgart; writing by Edward Taylor; Editing by Rupert Winchester)