Volkswagen shareholders approve rise in capital for Porsche

Volkswagen shareholders have overwhelmingly approved a capital increase aimed at financing a purchase of the luxury sports car maker Porsche, a VW statement said.

The issuance of 135 million preferential shares, worth more than €8 billion at their current price, was approved by 98.7 per cent of the investors attending an extraordinary general assembly in the northern port of Hamburg.

They represented 90.5 per cent of the capital in Europe's biggest automaker, the statement said.

"The capital framework, which is valid until December 2014, gives Volkswagen the financial flexibility needed to grow the integrated automotive group and also ensures appropriate liquidity and a healthy financing structure," the statement said.

Although the capital increase is to begin early next year, VW plans to buy 49.9 per cent of Porsche's capital next week.

A purchase of the Porsche Holding Salzburg which controls sales of iconic 911 sports cars and Cayenne sports utility vehicles is forseen in 2011 and would complete the takeover, which makes Porsche VW's 10th brand.

VW hopes to overtake Toyota as the world's biggest automaker by 2018.

A few minority shareholders nonetheless objected to the cost of the Porsche purchase, €3.9 billion, since the company also carried heavy debt of around €11.4 billion as of July 31.

VW estimates Porshe's total value at €12.4 billion.