Volkswagen AG stands to make around €9 billion by going public with Porsche shares

Image of the Porsche car logo. Credit: pngimg.com

German car manufacturer Volkswagen AG stands to make around €9 billion when they go public with shares in Porsche.

 

As announced on Monday, September 19, the German car giant Volkswagen AG will go public at the end of the month with the sale of shares in Porsche. The initial stock market valuation of the 113,875,000 preferred shares is estimated at between 70,000 and €75,000 million.

The number of shares could be increased by 25 per cent if, as expected, the demand outstrips the supply. In what is one of the most highly-anticipated IPO operations in the automobile sector in a long time, the Stuttgart-based car manufacturer stands to earn in the region of €9 billion. Banco Santander will oversee the operation in Spain.

Piech and Porsche, the two families who control the car company will remain in charge it is believed. The placement has been received with interest in financial and automobile circles, and investors are said to be studying the operation with some caution due to certain circumstances. 

Despite the fact that the valuation of the brand is approximately 25 per cent lower than the valuation of a similar company, such as Ferrari, the experience of Aston Martin’s collapse in the stock market last year has allegedly planted some doubts. The technological solvency of the German brand is of course beyond doubt.

Considering that it is the majority shareholder in Porsche, the recent appointment of VW confidant Oliver Blume as the CEO has apparently sown some doubt among investors about the company’s independence within the Volkswagen group.

The placement will start tomorrow, Tuesday, September 20, and will be listed before the end of the month. Three major investors have reportedly confirmed their participation.

They are: QIA (Qatar Investment Authority), the Norwegian sovereign wealth fund Norges Bank, T. Rowe Price and ADQ, who will subscribe shares worth up to €3.68 billion. The largest contribution will allegedly come from the Qatari fund, which will reportedly buy five per cent of the company, as reported by larazon.es.

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Written by

Chris King

Originally from Wales, Chris spent years on the Costa del Sol before moving to the Algarve where he is a web reporter for The Euro Weekly News covering international and Spanish national news. Got a news story you want to share? Then get in touch at [email protected]

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