A week after it admitted to cheating on US emissions tests for years, Volkswagen AG’s pain is beginning to spread throughout Europe’s credit markets.
The Bank of France on Friday stopped trading two securities backed by Volkswagen auto loans, while executives of parts supplier Schaeffler AG found themselves fielding questions about their biggest customer as they drum up support for an initial public offering (IPO), according to people familiar with the matters.
Since Volkswagen admitted on Sept. 18 that it had cheated on US air pollution tests since 2009, its chief executive officer resigned, the company became the target of a joint investigation by 27 US states and the stock price fell 28 percent.
Photo: Reuters
Matthias Mueller, the former Porsche chief who was appointed Volkswagen’s CEO on Friday, said his most urgent task is to win back trust for the company.
Suzuki Motor Corp on Saturday said it sold all the shares it held in Volkswagen to Porsche Automobil Holding SE, following the end of a four-year dispute over a failed partnership with VW.
The two Volkswagen-related securities were not in an updated list the Bank of France distributed on Friday after being included in the original version sent to investors earlier this week, said the people, who asked not to be identified.
The Bank of France is buying asset-backed securities under a European Central Bank purchase program designed to help boost lending in the euro area.
Volkswagen Financial Services has 22.8 billion euros (US$25 billion) of outstanding asset-backed debt, according to a presentation on its Web site this month.
Germany-based Schaeffler on Monday announced its IPO plans. Concerns about the impact of the Volkswagen issue, as well as Chinese and global market volatility, could affect investor views on the IPO valuation, according to the two people.
The company is planning to set a price range for the offering soon as it crisscrosses Europe to market the shares to investors from London to Zurich, the people said.
Schaeffler is telling investors that its products are not involved in the scandal and any decline in Volkswagen car production would have an insignificant impact on sales, according to two of the people.
An IPO could raise as much as 3 billion euros, sources have said.
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