Volkswagen’s works council raises prospect of more Porsche share sales

Volkswagen’s powerful works council has raised the prospect of the carmaker eventually selling more shares in its Porsche marque, which is set to go public later this month in one of Germany’s largest flotations.

The German carmaker has faced criticism from some investors for its plan to sell only 12.5 per cent of Porsche, its most profitable brand, in a long-awaited IPO that is likely to value the luxury carmaker at €70bn-€75bn.

Daniela Cavallo, who as head of VW’s works council wields significant influence at the company, said: “I do believe that Volkswagen will benefit from [the IPO] in the end.”

The proceeds would give the company “additional flexibility in terms of how [the company] can finance the transformation” from the era of the combustion engine to that of the electric vehicle, she told the Financial Times.

“That includes the hypothetical possibility of issuing further [non-voting] shares in the long term, if needed,” she said, but stressed that such a sale “is not planned” at present.

As well as controlling half of the 20 seats on VW’s supervisory board, the works council, which represents the interests of the company’s 300,000-strong German workforce, also benefits from a loose alliance with board members representing the state of Lower Saxony, a major VW shareholder.

Cavallo’s comments are the most open any senior figure at VW has been to the option of one day selling more of Porsche to investors. VW executives and bankers working on the IPO have rejected the prospect of additional share sales. “We rule out further placement at this time,” chief financial officer Arno Antlitz told reporters earlier this month.

The Porsche IPO comes as VW shoulders the financial burden of reinventing the company for the age of electric vehicles. The company has already committed more than €52bn to the development of battery-powered vehicles and will spend more to manufacture battery cells.

No discussions are now happening on further share sales, which were not “currently an option”, said Cavallo, but added: “Nobody knows whether we might be thinking about that option someday — but we could do, if needed. And that is positive.”

Volkswagen declined to comment.

The Porsche IPO “brings flexibility for the future and that’s, after all, why we’re going along with this from the employee side”, Cavallo said, pointing out that the rationale for the works council supporting the float was why it also backed the partial flotation of VW’s truck unit Traton in 2019.

As part of the IPO, roughly 130,000 VW workers in Germany, mostly represented by the works council, will receive a one-off payment of €2,000.

The Porsche-Piëch families, VW’s largest shareholders, will also buy 12.5 per cent of the Stuttgart-based company that carries their patriarch’s name — and their stake will carry voting rights.

Qatar’s investment vehicle, already a major VW shareholder, is expected to buy about 2.5 per cent of the non-voting shares being offered in the IPO, while Norges Bank, T Rowe Price and the Abu Dhabi sovereign fund have also committed to buy stakes.

Porsche chief financial officer Lutz Meschke told reporters earlier this month that only “severe problems” in geopolitics would stop the IPO from going ahead, despite the deteriorating global economic outlook.

Cavallo struck a more cautious note, saying that VW would “have to see how this phase really plays out, whether we actually implement the IPO in the end”.

“I’m hoping for the best because the feedback [from investors] is positive at the moment, even if there is volatility on the markets,” she said.

“I believe that, in the end, the [Porsche] workforce will benefit from this because Porsche has an impressive record.”


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