With Volkswagen now also tilting toward electrification, the proposed listing for the smaller subsidiary has been tagged as a pivotal move to achieve the firm’s longer-term growth proposals.
Interesting times lie ahead for German multinational automotive manufacturer, Volkswagen Group (ETR: VOW3) especially if the board reaches an agreement to take its subsidiary, Porsche public this month or the next. As reported by Reuters, the bone of contention and the ultimate agreement the board will need to reach is whether the listing should take place late this month or early in October.
The Reuters report was hinged on comments from the company’s Chief Financial Officer on Monday. When the board finally agrees on the date to take Porsche public, a 3 to 4 weeks window will be opened for investors to show their interest in the stock. Should the company gauge the level of interest as low, it may still pull the plug on the entire listing plan.
Arguably the largest automaker brand in the European Union, the potential listing of Porsche will be used to gauge how well investors trust the company. The listing will even be seen as a test at a time when the valuations of other automakers have continued to dwindle in the wake of tapered investor interest considering the general global economic landscape.
The war in Ukraine has particularly dampened the interest in European stocks, and other macroeconomic events fueling increasing inflation. The energy crisis in Europe is also a major impediment to economic growth as consumers now focus more on what matters than the luxuries that Volkswagen and Porsche typically represent.
Questioning the Porsche Listing Timing
Porsche is a luxury brand, but one of the oldest car brands around. With Volkswagen now also tilting toward electrification, the proposed listing for the smaller subsidiary has been tagged as a pivotal move to achieve the firm’s longer-term growth proposals.
Considering the strength of the global financial market and the economic instability in the EU, many have questioned the timing of the Porsche listing as generated revenue may be lower than anticipated. The question of efficiency in governance has also been brought to the fore with some highlighting how challenging it will be for Chief Executive Officer, Oliver Blume to govern both Volkswagen and Porsche at the same time.
“This is a key element for the Group, especially because the possible proceeds would give us more flexibility to further accelerate the transformation,” CFO Arno Antlitz who was appointed at the same time as Blume said in the company’s internal interview.
He pointed to the fact that the work he has been doing since he assumed office was centered on this forthcoming listing and how it will benefit the brand as a whole.
As the potential listing is up for consideration by the board, approval will also be sought whether Porsche SE, the parent company of Volkswagen will be able to cup up an additional 25% plus one share of ordinary shares in Porsche AG according to a February framework outlined by the duo.
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