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VW mulls 4 billion euro capital hike - paper
FRANKFURT, July 27 |
FRANKFURT, July 27 (Reuters) - Volkswagen (VOWG.DE) is considering a 4 billion euro ($5.7 billion) capital increase to offset the credit rating impact of its merger with Porsche (PSHG_p.DE), Financial Times Deutschland reported on its website on Monday.
Citing company sources, the newspaper said Volkswagen would acquire initially a 50 percent stake in the sports car maker and purchase the rest in 2011. The acquisition price is estimated at 8 billion euros, it added.
When contacted by Reuters, a spokeswoman from Volkswagen declined to comment on the report.
Volkswagen has cash reserves of 11 billion euros and can therefore afford to pay for the Porsche acquisition, the newspaper said.
But what was worrying was that Porsche's mountain of debts could drag down the credit rating of Europe's biggest carmaker, the newspaper reported.
German magazine Spiegel said Porsche's debts total around 14 billion euros. (ID:nLP530383]
Porsche said on Thursday it would seek at least 5 billion euros in fresh funds, setting the stage for its merger with Volkswagen. [ID:nSP513587]
The merger deal would create a combined automotive group targeted for mid-2011. Details on plans for the combined company were to be mapped out at VW supervisory board meeting on August 13. ($1=.7043 Euro) (Reporting by Marilyn Gerlach; Editing by Lincoln Feast)
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