Porsche, the heavily indebted maker of German luxury sports cars, rejected on Monday a merger offer by Volkswagen, Europe's biggest car maker.
"There is an offer by Volkswagen. For us it is not a practical way," a Porsche spokesman told AFP.
In the event of a merger, a credit worth 10.75 billion euros (15 billion dollars) agreed to by a consortium of banks in favour of Porsche would have to be renegotiated "right away," he added.
A press report said over the weekend that VW had presented a merger proposition to Porsche which would proceed via cross shareholdings, with VW taking a stake of 49.9 per cent in Porsche.
Porsche currently owns 51 per cent of the shares in VW.
The plan "was transmitted to Wolfgang Porsche last week," but "it has not been brought to the attention of the Porsche board," the spokesman said.
Relations between the two car makers have deteriorated in recent weeks, as well as between the owners of Porsche, the Porsche and Piech families.
Ferdinand Piech, head of the VW supervisory board, and his cousin Wolfgang Porsche disagree on how to get Porsche out of the financial dead-end it finds itself in since buying a majority of VW's shares.
The move was in large part responsible for Porsche's current debt of around nine billion euros.