German auto group Volkswagen AG on Monday said that it would go ahead this year with a highly anticipated stock market entry for its premium sports brand Porsche, despite less than perfect financial conditions.
“The board of management of Volkswagen AG today resolved ... to pursue an initial public offering [IPO] of the preferred shares of Porsche AG with the target to list them on the regulated market of the Frankfurt Stock Exchange ... at the end of September/beginning of October 2022,” a statement said.
“In the event of a successful IPO, Volkswagen AG will convene an extraordinary general meeting in December 2022 at which it will propose to its shareholders that a special dividend amounting to 49 percent of the total gross proceeds from the placement of the preferred shares and the sale of the ordinary shares be distributed,” it added.
Photo: Reuters
The auto giant officially signaled its intention to go ahead with the IPO on Feb. 24, the day that Russia began its invasion of Ukraine.
“This is a historic moment for Porsche,” new Volkswagen CEO Oliver Blume said, adding that Porsche could have “greater independence” and be one of “the richest sports car makers in the world.”
The outbreak of the war has sown uncertainty in financial markets, sending stocks tumbling and clouding the outlook for the economy.
However, the luxury brand continues to attract the attention of investors, who value Porsche between 60 billion and 85 billion euros (US$59.8 billion and US$84.7 billion), Bloomberg News said.
Suitors including the Qatari sovereign wealth fund and luxury brands group LVMH Moet Hennessy Louis Vuitton SE have registered an interest in the high-end automaker, the news agency said.
Under the spin-off plan, Volkswagen’s main shareholders — the Porsche-Piech family — would take a share of 25 percent plus one share in the luxury automaker. In doing so, the family would hold a blocking minority that would allow them to steer the future of the group that bears their name.
Market investors would be given the opportunity to buy preferential shares in Porsche that have no voting rights, but receive a boosted dividend. The potential spin-off of the iconic automaker, named for the Porsche family, from the larger group would help Volkswagen finance its own shift toward electric vehicles.
The Wolfsburg-based group is pumping tens of millions into the strategy, including building a clutch of battery factories across Europe and the US.
The potential gains from the IPO would give Volkswagen “greater flexibility to accelerate the transformation” of the group, chief operating officer Arno Antlitz said in an interview on Monday.
Volkswagen’s recently departed CEO Herbert Diess launched the legacy automaker on the headlong electrification strategy, bringing it into competition with the likes of US battery vehicles pioneer Tesla Inc.
Blume was elevated to his new role last week from Porsche itself, where he still holds the title of chief.
Blume, a Volkswagen group veteran, has said he wants to “keep up the current pace and where possible, increase it” on electrification.
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