Wednesday, 8 December 2021

Volkswagen Considers Porsche IPO to Fund EV


Volkswagen shares were up 3% in Wednesday morning trading.

Getty Images for goop

Volkswagen is considering listing its Porsche luxury-car unit to help fund its ambitious plan to switch to electric vehicles, according to several media reports.

Porsche AG , the maker of the eponymous cars of the same name, could have a market capitalization of between €45 billion and €90 billion ($101 billion), according to Reuters and other news outlets.

The Piech and Porsche families who own 31.4% of Volkswagen (ticker: XE:VOW) and 53.3% of its voting rights through their holding company Porsche SE , would sell part of their stake in Volkswagen to fund a direct shareholding of the luxury-car maker, the daily Handelsblatt reported.

The families could raise up to €15 billion in the process, for use toward potential holdings in a listed Porsche, the German business newspaper added. They would remain Volkswagen’s largest shareholder, ahead of the state of Lower Saxony, which owns a 11.8% stake and 20% voting rights in the company.

A representative for Volkswagen said in an email that the group “is constantly reviewing options that serve to further develop and implement the Group’s strategy and raise the value of the company,” but that it wouldn’t “comment on the details.” Porsche didn’t immediately reply to an emailed request for comment.

Volkswagen, the world’s number-two automobile company, launched an ambitious plan in March to become the global leader in electric vehicles. But CEO Herbert Diess has struggled since then, as supply-chain bottlenecks and difficulties on the Chinese market have clouded the group’s prospects.

Volkswagen shares were up 3% in Wednesday morning trading. But the stock is down nearly 20% since the highs it reached in March after the announcement of its EV strategy.

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