Volkswagen shareholders are irritated by the late payment of the Porsche dividend.
(Photo: dpa)
Berlin, Dusseldorf, Frankfurt VW had convinced its investors of a Porsche IPO with a special dividend. But it should take until the beginning of January for the 9.55 billion euros to be distributed to the shareholders as a special payment. The group announced this last month.
On December 16, the shareholders are to approve the plan at an extraordinary general meeting in Berlin, the day after that the share will be traded with a dividend discount (“ex dividend”). However, the special dividend of EUR 19.06 per share will not be paid out until January 9th.
Several owners are irritated by this schedule. “Splitting the ex-date of a dividend and the payment of this dividend over two calendar years has numerous disadvantages for an asset manager and its customers,” says Ralph Weidenmann, partner at the asset manager Swisspartners. Representatives of some major VW shareholders made similar statements.
The delayed dividend payment goes back to the initiative of the state of Lower Saxony, as the Handelsblatt learned from insider circles. The state holds 11.8 percent of the shares in Volkswagen, making it one of the largest shareholders. The country collects around 1.13 billion euros from the special dividend – and should therefore have decided on a special budget for 2022 if the money had flowed this year. According to several people familiar with the events, the State Chancellery wanted to avoid this special budget.
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But this plan not only caused discussions with the group and other shareholders who would have preferred to get the money as soon as possible. The request has led to numerous other problems, according to an insider.
Because the structure of the Porsche IPO at the end of September was almost complete – and had to be adjusted. The main owners of VW and the biggest beneficiaries of the Porsche IPO, the Porsche and Piëch families, initially only acquired a 17.5 percent stake in the sports car manufacturer Porsche AG via their holding company.
“The client is missing the entire dividend in 2022”
Only when the special dividend has been paid in January will the family holding acquire a further 7.5 percent. The purchase price will be offset against the special dividend. Many other questions, such as those on minority rights, should also have been answered. All of this has complicated the transaction, it is heard.
VW CEO Oliver Blume (right) and Porsche CFO Lutz Meschke at the IPO of the sports car brand in September.
(Photo: dpa)
The country declined to comment. Despite repeated requests, Volkswagen could not be reached for comment, nor could the owner families.
The value of a share usually decreases by the value of the distributed capital on the day after the dividend declaration, when the share is traded “ex-dividend”. Typically, shareholders receive their dividends almost simultaneously, so the bottom line is that they have the same amount of money in their pockets. In the case of the Porsche special dividend, there is a gap of 14 working days.
“The client is missing the entire dividend in 2022 both in assets, in performance and in earnings. This also has tax implications (loss offset, income tax, wealth tax for customers in a country with wealth tax). At VW, this process accounts for 15 percent of the current market value,” criticizes Weidenmann.
VW makes use of an exception
The German Stock Corporation Act stipulates that the dividend must generally be paid on the third business day following the resolution of the Annual General Meeting. Volkswagen also adhered to this with the regular dividend and the annual general meeting this year. On May 12, the Annual General Meeting passed the dividend resolution, and the payout followed three business days later on Monday, May 17.
With the special dividend and the extraordinary general meeting in December, however, Volkswagen made use of an exception option that is expressly permitted under stock corporation law. The German Stock Corporation Act states that the general meeting resolution on the dividend “can set a later due date”.
In stock exchange trading, on the other hand, no consideration is given to the late payment of the special dividend. As stated in Volkswagen’s invitation to the extraordinary general meeting, the first “ex-dividend” quotation is planned for the next working day after the shareholders’ meeting, Monday 19 December.
More: Porsche increases profit much faster than sales.