Porsche’s holdings in Volkswagen rise to 75%
The German car maker, Porsche, will be seeking full control of Europe’s biggest auto manufacturer, by raising its holdings in Volkswagen to 75%.
Porsche announced that it had raised direct stakes in Volkswagen to 42.6% from 35.2% with the option of an additional 31.5%. It also intended to lift it above 75% in 2009, if the global economic situation improved. Under the German law on corporate, this would pave way for a domination agreement.
Porsche is confident of crossing the 50% mark in the coming weeks. It made this move after the European Commission made its intention public to move the court over Germany’s refusal in lifting a 20% blocking minority in VW enjoyed on behalf of state by Lower Saxony. EC’s decision, to be announced in this week, is the latest step in prolonged dispute between Berlin and Brussels over “VW” law 1960, which was struck down by the European court last year.
Germany’s amended law still gave Lower Saxony a 20% vote despite the fact that Germany’s corporate law allowed blocking minority at 25%. The chancellor, Angela Merkel, assured 30,000 VW workers that she would fight to retain veto but her government might have to pay tens of millions of euros as fine if it disobeyed the court order. Porsche is supporting the EC.
The world’s most profitable sports car maker has increased its stakes in VW through abortive “short selling” by hedge funds in VW stock.
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