Porsche investors approve capital increase

Porsche shareholders late on Tuesday approved a capital increase worth €5 billion as part of a planned takeover by Europe’s biggest automaker Volkswagen.

The operation is expected to be completed by late May, though it could take until the end of August, and is designed to help Porsche reduce its debt burden of €6 billion ahead of the takeover.

VW already owns 49.9 per cent of Porsche and wants to acquire the rest by next year but both companies have warned the deal might face delays.

The financial director of both companies, Hans Dieter Poetsch, told shareholders gathered in Stuttgart, southern Germany, he “could not guarantee the takeover by Volkswagen will take place just after the capital increase.”

In addition to tax issues, the operation could be held up by complaints filed by investors against Porsche, charging the company manipulated markets in 2008 when it tried to buy the much larger VW.

Plaintiffs have demanded several billion euros in damages and interest.

VW has nonetheless drafted an alternative plan to ensure it obtains a majority holding in the maker of 911 sports cars and Cayenne sports utility vehicles.

The acquisition of Porsche, which would become VW’s 10th brand, is aimed at helping the latter overtake Toyota as the world’s largest automaker by 2018.

VW shares showed a gain of 2.06 per cent to €126.35 in morning trades on the Frankfurt stock exchange, while the DAX index of leading stocks was 0.83 per cent higher overall.

In over-the-counter trading, Porsche shares were up by 1.76 per cent at €58.95.

Merck Finck analyst Robert Heberger maintained his recommendation to sell Porsche shares however, saying: “we continue to believe that Porsche SE is a highly speculative stock, which is mainly driven by external, non-operating uncertainties.”