Vw could raise 10 billion euros for Porsche and other acquisitions
By Andrew C., 26 Aug, 2010. 0 Comments
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With a market value of 43 billion euros, Volkswagen said that it will seek clearance in December to issue up to 135 million new preferred shares by December 2014, a large portion of which could enter the market by the middle of 2010. The share issue plans, which took many by surprise, was actually hinted at by VW's chairman when said last September that it could expand its stable of brands to 12 from nine.
It's possible for VW to extend its reach as a truckmaker by purchasing remaining shares in German peer MAN AG, according to an analyst. VW is currently undergoing a multi-stage process to integrate with Porsche SE by 2011. This process has both companies moving to shore up their balance sheets. Based on the current price of VW's preferred shares, its latest initiative could raise 10 billion euros.
If a 20% discount is applied to the current price, it would still be able to generate 8 billion euros. By issuing preferred shares, VW avoids diluting the voting stakes of shareholders, which include Porsche with 51 percent and the German state of Lower Saxony with about 20 percent.
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