Porsche boards will decide on the details of a planned $7 billion share sale

Article by Christian A., on March 28, 2011

Porsche Automobil Holding SE’s executive and supervisory boards will make the decision on the terms of a planned 5 billion euro ($7 billion) share sale on Sunday. In a statement, Porsche said that a group of banks agreed to underwrite all new ordinary and preferred shares to be offered at 38 euros each.

Porsche, which is planning to merge with Volkswagen AG, said that holders of ordinary shares have said that they agree to the subscription price and intend to exercise their rights for the new ordinary shares. In the previous week, Porsche said that it aims to use the proceeds to bring debt down to 1.5 billion euros.

It clarified that even as the financial markets are volatile after the Japan disaster, a timetable to sell new shares still stands, according to Autonews. In August 2009, Porsche and Volkswagen agreed to merge after Porsche’s debt ballooned to more than 10 billion euros after it failed to gain control of VW.

But because of German legal obstacles, this merger will likely be delayed into next year. Initially, it was set to be completed in the second half of 2011.

Porsche said on Feb. 24 that a probe into share-price manipulation allegations will probably mean that the deal will be completed only in 2012. Last year, Porsche shareholders approved the stock sale to raise funds. Half of these come from the Porsche and Piech families, who control the common stock.

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