VW’s shareholders may not get any money for 2015 as diesel scandal costs rise image

According to a recent report, Volkswagen may not give any dividends for 2015, as the financial implications of its diesel scandal become deeper and deeper.

There are recalls to be taken care of by Volkswagen, fines from regulators and lawsuits pending, thus its diesel emissions saga will prove to be very pricey. There are some analysts estimating the scandal could cost Europe’s biggest automaker more than 30 billion euros after it admitted that 11 million of its cars were fitted with the cheating device. Therefore, it is no wonder that the Group may not grant any 2015 dividend payout, according to the German news agency DPA. “There is no sign that shareholders might even be able to hope for a single cent,” the agency reported, citing a VW board member as its source. The company said it would give further details of a dividend outlook at its annual results press conference from the end of April and that no decision has yet been made.

Many shareholders have already started a legal battle to recoup some of their money, considering that over 20 billion euros in market value have vanished almost overnight from Volkswagen, since the scandal has started back in September.

To make sure it has the proper cash to face the storm, Volkswagen reportedly signed a 20 billion-euro bridge financing deal with about 13 banks in December. The banks, led by Citigroup Inc. and UniCredit SpA, will each grant a loan of either 1.5 billion euros or 2.5 billion euros, said the sources, and VW could have raised as much as 29 billion euros and the credit line could be turned later into bonds for repayment.

Via Automotive News