Volkswagen will raise net proceeds of about $5.46 billion

Article by Christian A., on August 25, 2010

Volkswagen AG announced last Thursday that it will increase net proceeds of about 4.1 billion euros ($5.46 billion) after issuing 64.9 million new preferred shares, each priced at 65 euros in its rights issue. VW said in its latest regulatory filing that shareholders could subscribe to six new non-voting shares for every 37 they currently own, even as the entire allotment had been placed on the market pending a so-called "clawback" option.

The new preferred stock issued via the capital increase will be fully entitled to the 1.66 euro dividend per share VW intends to distribute for 2009.

VW said that the company will increase the net proceeds of about 4.1 billion euros from the capital increase, according to the conditions in the subscription offer.

The carmaker added that all new preference shares were placed in the pre-placement. The allocation of preference shares to institutional investors is subject to a 27.2% clawback.

VW explained that the extent of clawback would depend on the number of existing shareholders that choose to exercise their subscription rights.

About 90% of VW's votes are controlled by Porsche Automobil Holding SE, the German state of Lower Saxony and Qatar's sovereign wealth fund. All have agreed to transfer their rights in advance to the banking consortium managing the sale.

Topics: vw

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