Volkswagen Group has sold €2.5 billion ($3.2 billion) in convertible bonds in order to boost liquidity after the company recently bought Porsche and Ducati brands.
VW had liquidities of more than €21 billion in September 2011, but a year later liquidities amounted to €9.1 billion. Buying the remaining 50.1 percent of Porsche sports cars in August cost it nearly €7 billion in equity and debt, while buying Ducati in July required nearly 750 million.
Volkswagen said in a statement today that the three-year notes will pay an annual coupon of 5.5 percent. The minimum conversion price has been set at 154.50 euros and the maximum at 185.40 euros.
Analysts believe the money may be used to complete the takeover of German truckmaker MAN SE, already controlled by VW. “It seems that VW wants to proceed with the takeover of MAN SE. The acquisition of the shares of the truckmaker VW does not already own will cost about 3.3 billion euros,” Michael Punzet, an analyst at DZ Bank in Frankfurt, was quoted as saying by Bloomberg.
VW could also use the money to purchase the share in Scania AB that it does not own or to take a stake in Navistar International Corp. in the U.S., according to Bernstein Research analyst Max Warburton. The money could also be used to buy Alfa Romeo or Ferrari from Fiat, he added.