Volkswagen also agreed to a sale of 25 percent plus one share of Porsche AG’s common stock to Porsche SE, giving the controlling Porsche and Piech families a blocking minority and increasing their push for a tighter leash on the automaker.
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Volkswagen said an IPO would be a significant step in the company’s transformation as it aims to expand its software and electric vehicle offerings.
Porsche’s status as a luxury brand that can drive up prices makes it a moneymaker for the Volkswagen Group. Its operating profit jumped 22 percent in the first half of this year, in contrast to an 8 percent decline at mass-market-oriented Volkswagen brand.
However, some investors say it’s a dangerous time to go public as European stocks are in a downward spiral, inflation has risen to record highs and Russia has halted gas supplies.
Insisting on the stock market listing even in the face of such market turbulence is solely in the interest of the Porsche and Piech families’ desire for more control, said Hendrik Schmidt, governance expert at Volkswagen investor DWS.
“The market conditions are currently very unfavorable,” said Ingo Speich, head of sustainability and corporate governance at top 20 Volkswagen investor Deka Investment, and did not want to comment on whether Deka would buy Porsche shares.
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If the IPO is successful, Volkswagen will convene an extraordinary general meeting in December to propose a special dividend of 49 percent of the proceeds to be paid out in early 2023.
“VW should work on its timing: the IPO plan was announced on the same day that Russia invaded Ukraine, the ‘intention to float’ comes out right when Russia cuts off gas supplies to Germany,” they said Analysts from Stifel.
The German car association expects car deliveries in Europe to fall by 4 percent this year, with the hoped-for recovery after the pandemic still to come.
Reuters
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