Volkswagen To Raise EUR4.1 Billion Through Rights Issue
25 Mars 2010 - 11:11PM
Dow Jones News
German auto maker Volkswagen AG (VOW.XE, VLKAY) said Thursday it
will raise around EUR4.1 billion by issuing 64.9 million new
preference shares against cash contributions, making it the largest
capital increase in Europe's largest economy in recent years.
"The subscription price for the new preference shares...has been
set at EUR65," Europe's largest automaker by sales said in a
statement.
Volkswagen said all new preference shares were placed in the
preplacement. The allocation of preference shares to institutional
investors is subject to a 27% clawback if the shareholders who have
not assigned their subscription rights in advance to the global
coordinators exercise their subscription rights.
A group of banks had agreed to subscribe and underwrite the new
shares, with a notional value of EUR2.56 each and full entitlement
for 2009 dividends, as well as to offer them to shareholders by way
of indirect subscription rights.
BofA Merrill Lynch (MER), Citigroup Inc. (C), Deutsche Bank AG
(DB), HSBC Trinkaus (TUB.XE) and J.P. Morgan (JPM) are acting as
global coordinators and joint book-runners.
Ahead of the subscription period, the shares are being offered
to private investors in Germany as well as in private placements to
institutional investors in Germany and abroad. The so-called
preplacement with institutional investors started Tuesday.
The company's three main shareholders, Porsche Automobil Holding
SE (PAH3.XE), the German state of Lower Saxony and the emirate of
Qatar, had agreed to transfer their subscription rights to the
syndicate banks.
The settlement of the new preference shares attributable to
subscription rights assigned by the major shareholders is expected
on March 31. The final settlement of the remaining new preference
shares is expected on April 16.
Volkswagen intends to use the proceeds from the capital increase
to safeguard its financial flexibility during the integration of
Porsche, which is due to be finalized in 2011, and maintain its
current credit ratings.
-By Christoph Rauwald, Dow Jones Newswires; +49 69 29 725 512;
christoph.rauwald@dowjones.com
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