The German automaker’s supervisor board is now mulling a strategy to limit the credit rating drop of the company following the massive diesel cheating scandal that broke out just two weeks ago.
According to a couple of persons familiar with the board that talked to Reuters under condition of anonymity, the supervisory board is worried of further collapses if the credit rating drops as a consequence of the scandal that broke out when the company admitted it had cheated US emissions tests and furthermore 11 million vehicles worldwide were equipped with the illegal software. The board is now mulling further cost cutting measures and other ways of lifting cash flow, though it has not contemplated divesting any VW assets or some of its 12-brand portfolio, said the sources. One of the persons added that capital increase options have been weighed as a measure of safeguarding the company if the costs related to the scandal were to surge past a “critical level”.
The world’s (interim) largest and Europe’s biggest carmaker by sales has acknowledged it had rigged diesel emissions tests in the United States and Germany’s transport minister claimed the company did the same in Europe, where the group has around 40 percent of its global deliveries. The largest crisis in the company’s 78-year history has brought a new chief executive officer – Matthias Mueller – after long-running Martin Winterkorn decided to resign and the group saw a third of its market value wiped off in a matter of days last week. VW shares have now recovered slightly, up 3.6 percent in early trading on Thursday.