German automaker Porsche, which is planning to merge with Europe largest automaker – Volkswagen AG, has approved an almost €5bn (£4.4bn) capital increase, clearing the way for the merger.
A group of banks agreed to underwrite all new ordinary and preferred shares to be offered at 38 euros apiece, Porsche said in a statement late yesterday.
Porsche SE said it will raise net proceeds of about 4.89 billion euros from the offering, provided the new shares are fully subscribed. The automaker added that it expects the public offering to be approved by German financial watchdog BaFin on March 28. The subscription period for the new shares is then due to last from March 30 until April 12.
“It’s not the perfect timing given how volatile the market has been in recent weeks, but they’re under pressure to get this done,” said Juergen Pieper, a Frankfurt-based analyst at Bankhaus Metzler who recommends buying the shares.
“They’re averting the much greater damage that would occur if the merger were pushed back for months.”
The merger, originally scheduled for completion in the second half of 2011, will probably be delayed into next year because of German legal obstacles.
Porsche SE is 90 percent owned by the Piëch-Porsche family and 10 percent owned by the emirate of Qatar.