Volkswagen starts issue process for 65 million new shares to finance Porsche integration
By APTuesday, March 23, 2010
Volkswagen starts new shares issue process
FRANKFURT — German carmaker Volkswagen AG on Tuesday started the issuance of some 65 million new shares to help finance its integration of sports car maker Porsche.
Volkswagen launched the preliminary issuance of the new shares to institutional investors — the so-called pre-placement.
Volkswagen, based in Wolfsburg, didn’t release final pricing and volume details, but said more information should be forthcoming this week.
It got approval from shareholders in December to issue up to 135 million new shares over the next five years to finance the initial 49.9 percent stake in Porsche — valued at near €4 billion ($5.4 billion).
Volkswagen has said it wants to acquire the rest of Stuttgart-based Porsche, the maker of the 911 and Panamera sportscars, in 2011.
Volkswagen is Europe’s largest automotive company and will have 10 brands once Porsche is included into the group. Other brands include Audi, Seat, Skoda and Bentley. VW also holds large stakes in two European truckmakers, Germany’s MAN SE and Scania AB of Sweden.
It said Tuesday that the capital increase will also be used to strengthen the financial stability and flexibility of the company and to help maintain its current credit ratings.
VW shares dropped more than 5 percent on the news to €71.61 in Frankfurt afternoon trading.
Volkswagen’s current market capitalization, a measure of a company’s value based on number of shares times their price, is almost €28 billion.
On the Net:
www.vw.com
www.porsche.com
