Mon. Sep 26th, 2022
Volkswagen sets Porsche IPO at up to 9.4 billion euros

BERLIN, Germany — FRANKFURT As part of its preparations for an IPO, Volkswagen has determined the range in which it would sell a minority interest in luxury brand Porsche. The proceeds will be used to finance VW’s investments in new technologies and companies, such as electric vehicles, software, and services.

As of September 29, the German carmaker Porsche AG, which produces the 911 sports vehicle and the Cayenne SUV, plans to list on the Frankfurt stock market after selling up to 25% of its non-voting preferred shares to investors.

Volkswagen estimates 9.4 billion euro market value for Porsche IPO
Volkswagen estimates 9.4 billion euro market value for Porsche IPO

The Qatar Investment Authority (QIA) has agreed to purchase 4.99% of the company, with Norges Bank Investment, T. Rowe Price, and ADQ acquiring lesser portions.

Preference shares were priced between 76.50 and 82.50 euros (8.71 and 9.39 billion euros total). Porsche’s IPO holding amounts to 12.5% of the firm according to the capital structure, which is composed of 50% preferred shares and 50% ordinary shares.

Volkswagen’s majority shareholder, the Porsche and Piech families, will get 25% plus one share of ordinary stock at a premium of 7.5% as part of the purchase.

Sales of both preferred and ordinary shares at the maximum price would generate a total of 19.5 billion euros, of which 49% would be distributed as a dividend to shareholders and the remaining funds would be used to further the company’s investment goals.

Volkswagen has made a large investment in the development of electric vehicles, and the company expects a growing portion of its future revenues to come from sales of such vehicles as well as related software and services.

The manufacturer claims that the transaction would provide Porsche more “entrepreneurial autonomy,” but that it will still fully incorporate Porsche in its financial statements. VW also said that the “extensive continuation” of their current industrial partnership with Porsche will occur.

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