FRANKFURT (Reuters) - Volkswagen (VOWG_p.DE) was on track on Thursday to raise more than 4 billion euros ($5.33 billion) in a jumbo rights issue Europe"s biggest carmaker launched to protect its credit rating as it funds its ambitious acquisitions.
The order book for the rights issue -- Germany"s biggest ever -- is set to close later on Thursday, two sources familiar with the transaction told Reuters.
Traders cited market talk that the issue of up to 65 million non-voting preferred shares would be priced at 64 to 65 euros each.
That would raise as much as 4.23 billion euros for VW, which is seeking to dethrone Japan"s Toyota (7203.T) as the world"s biggest carmaker by the end of the decade.
VW is set to absorb overextended parent Porsche (PSHG_p.DE) next year and has made no secret of its desire to bring MAN (MANG.DE) -- of which it owns 30 percent -- into a trucks alliance with Swedish unit Scania (SCVb.ST) at some stage.
VW had a 10.6 billion euro cash pile at the end of last year after paying 3.9 billion euros for half of Porsche"s sports car business in 2009.
It then spent another 1.7 billion euros for a near 20 percent stake in Japanese small car specialist Suzuki (7269.T) in January.
VW preferred shares were trading down 1.1 percent at 68.30 euros by 1330 GMT, after falling as much as 3.1 percent. Germany"s DAX index .GDAXI was up 1.33 percent.
"I don"t think the share price will go much below where it is now," one trader said when it was down 2.5 percent earlier in the session.
CAPITAL NEEDS
VW has said it expected to announce on Friday the offer price, subscription ratio and the final offer volume for the new shares, which carry full dividend rights for this year.
A successful placement could head off a bond issue convertible into as many as 40 million new preferred shares that Volkswagen has said it would ask shareholders to approve.
"We always clearly communicated that we wanted to cover a capital need of about 4 billion euros. And we"re doing that now," a spokesman for VW had said on Wednesday.
The plan to have a convertible bond alongside a share sale, announced on March 11, lifted VW stock by easing investors fears of a sudden dilution.
The stock broke a key resistance point and surged above 74 euros on March 12, hitting highs not seen since before VW"s third-biggest investor Qatar placed 25 million non-voting shares in November. Qatar has a 17 percent voting stake.
VW said in its stock sale prospectus, it would not place any new shares or issue any convertible debt for six months from March 23. Major shareholders like Porsche SE agreed to a lockup of 30 days.
Global coordinators on the deal are JP Morgan (JPM.N), Citigroup (C.N), Deutsche Bank (DBKGn.DE), Merrill Lynch (BAC.N) and HSBC (HSBA.L).
($1=.7508 Euro)
(Reporting by Philipp Halstrick, Andrea Lentz and Angelika Lehmann; writing by Michael Shields; editing by Karen Foster)
Deals
No comments:
Post a Comment