The IPO of Porsche AG would increase the financial flexibility of the Wolfsburg-based group. However, the actual feasibility has not yet been clarified.
(Photo: dpa)
Dusseldorf The planned IPO of the Stuttgart sports car manufacturer Porsche is anything but certain. Above all, a long war in Ukraine threatens to upset the schedule. “Nor can we rule out potential implications for the IPO if the conflict lasts longer,” said Johannes Lattwein, CFO of Porsche SE, on Tuesday. So far, the IPO is planned for the fourth quarter.
Porsche SE (PSE) plays a key role in the plans of the Volkswagen Group, which intends to give its highly profitable sports car subsidiary greater independence by going public. PSE should not be confused with the car manufacturer Porsche AG. The Porsche-Piëch family has bundled its Volkswagen shares in the holding company, which is listed on the Dax. As part of the IPO, PSE is to be given a blocking minority stake in the sports car manufacturer.
“The terrible events cannot be denied,” said PSE CFO Lattwein. However, one hopes for a diplomatic solution. At the same time, Porsche SE is counting on the fact that the general economic consequences of the war will be limited and that the Porsche IPO will remain possible.
According to Lattwein, Porsche in Stuttgart and Volkswagen in Wolfsburg are still working intensively on the stock market plans for the sports car manufacturer. “We don’t have much time left either,” added the Chief Financial Officer. Porsche AG could have a market value of between 80 and 90 billion euros.
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Volkswagen intends to place 12.5 percent of its shares on the stock exchange as preferred shares. The Porsche-Piëch family is also to receive 12.5 percent plus one share via the PSE – albeit in the form of ordinary shares with voting rights. That would give the family much more direct access to the sports car manufacturer. Before it was taken over by Volkswagen ten years ago, Porsche AG was completely family-owned.
According to initial conservative estimates, Porsche SE would probably have to raise around ten billion euros to secure the blocking minority. CFO Lattwein gave the first indications of the financing methods PSE is pursuing.
“There are no plans to reduce the shares in Volkswagen AG,” said the manager. The family holding company currently holds around 53 percent of the voting rights in the VW Group. PSE CEO Hans Dieter Pötsch had previously emphasized that Volkswagen would remain the core holding and that the holding company wanted to retain its role as an anchor shareholder. Pötsch is also Chairman of the Supervisory Board at Volkswagen.
Lattwein and Pötsch indicated that the family holding company would most likely use loans to finance the purchase of the Porsche shares. There are “good chances” to borrow capital for this, said the CFO.
Porsche SE currently has an equity share of 99.2 percent. Banks should therefore be able to provide credit relatively easily. With this, the PSE could possibly finance around two-thirds of the total purchase price. With the expected high dividends from the sports car manufacturer, debt should be reduced again in the years to come.
>>Read here: How Porsche is already becoming more independent of Volkswagen
Porsche SE intends to cover the remaining part of the financing with a special dividend, which Volkswagen had already decided at the annual general meeting last summer. The issue proceeds, which would flow into the VW coffers after a Porsche IPO, are later to be distributed largely to the company’s own shareholders – including PSE.
CFO Lattwein confirmed that the special dividend should be used for the planned purchase of the Porsche shares. The company’s own shareholders would later benefit from an increase in the holding company’s value if it held a significant stake in the sports car manufacturer Porsche.
Last year, Porsche SE earned 4.6 billion euros, around two billion more than in the first corona year of 2020. Almost the entire profit goes back to the VW Group. For 2022, the PSE is planning a profit of between 4.1 and 6.1 billion euros.
The shares of Volkswagen and Porsche SE were among the winners in the Dax, the leading German stock index, on Tuesday. By midday, both stocks were up about three percent, one percentage point more than the market average.
More: Lower Saxony is considering a higher stake in VW after the Porsche IPO