Volkswagen has officially set the price range for the sale of a minority stake in Porsche.
Key Details
- Volkswagen has set its eyes on new business ventures, mainly electric vehicles (EVs), software, and services.
- To fund its new ventures, Volkswagen is preparing an initial public offering (IPO) of a minority stake in luxury brand Porsche.
- The German automaker said it aims for a listing on the Frankfurt stock exchange on September 29 after it places up to 25% of non-voting preferred shares in Porsche AG, with investors, reports AP News.
Why it’s important
Volkswagen set the price range per preferred share at 76.50 euros (U.S.$76.57) to 82.50 euros (U.S.$82.57), which equals 8.71 billion to 9.39 billion euros.
Porsche’s share capital has been split into 50% preferred and 50% ordinary shares, so that the IPO stake represents 12.5% of the company, according to AP News.
The deal also states the sale of 25% plus one share of ordinary shares at a 7.5% premium to Porsche Automobil Holding SE, which is Volkswagen’s controlling shareholder.
If the sale goes for the maximum price, the total brought in by the sale of both the preferred and ordinary shares would be 19.5 billion euros (U.S.$19.5 billion). About 49% would be paid to shareholders and the remaining funds would go to the company’s investments.
Porsche is mainly optimistic about the IPO.
Porsche’s IPO will give the Porsche family an opportunity to retake control of the company after losing authority in 2009.
Backing up a bit
Volkswagen has been taking big steps towards making electric vehicles. The company began looking to Canada to strike a deal for its next step.
The German automaker is planning to invest in Canadian mines and mine operators and has been speaking with the Canadian government to make it all happen.
The mining operations provide key resources for the manufacturing of batteries for EVs.
