WASHINGTON - Orders for long-lasting manufactured goods rose more than expected in April, a sign of resilience in the factory sector despite belt-tightening in Washington and weakness in overseas markets.
LONDON - From ketchup to hot drinks, family-run investment firms are shaking up the consumer deals market, squeezing out private equity players and forcing them to change strategy.
BEIJING/HONG KONG - China reiterated its opposition on Thursday to a European Union plan to limit airline carbon dioxide emissions and called for talks to resolve the issue a day after its major airlines refused to pay any carbon costs under the new law.
Volkswagen to raise 4 billion eur via shares, bonds
WOLFSBURG, Germany |
WOLFSBURG, Germany (Reuters) - Volkswagen (VOWG_p.DE) eased shareholder fears it would flood the market with new stock, outlining plans to use a convertible bond alongside a share sale to help fund an acquisition spree.
The finance chief of Europe's biggest carmaker said VW plans to raise around 4 billion euros ($5.4 billion) and would ask shareholders on April 22 to approve a bond issue convertible into 40 million preferred shares at a much later date.
"Such an authorization would give us a further financing instrument, which we consider to be standard for increasing the financial flexibility of major joint stock companies such as Volkswagen but which is not available to us at the moment," Hans Dieter Poetsch said on Thursday .
Volkswagen needs to add to its 10.6 billion euro cash pile -- effectively accumulated entirely by its crown asset, luxury brand Audi -- for an acquisition splurge to dethrone industry leader Toyota (7203.T) within a decade.
This includes 16 billion euros in equity and debt to buy Porsche SE's (PSHG_p.DE) lucrative sports car business and Europe's largest independent car dealership, Porsche Holding.
VW stock rose over 5 percent, making it the biggest gainer in Germany's DAX, after investors were relieved their holdings would be diluted gradually over a longer period of time, taking the sting out of a capital increase planned for the first half.
Together the two financing measures would not exceed the limit of 135 million new preferred shares approved in December, an amount that would double that class of capital stock and would be worth around 9 billion euros at current market prices.
VW said the debt issue would be bearer bonds with warrants or convertible bonds with a maximum term of 20 years "on one or several occasions in the period until April 21, 2015."
VW paid 3.9 billion in cash last year for half of Porsche AG and spent another 1.7 billion euros for a near 20 percent stake in Japanese small car specialist Suzuki (7269.T) in January.
Investors feared VW could dump all 135 million non-voting shares on the market to fund both transactions as well as future plans that will likely include raising its 30 percent stake in German truckmaker MAN (MANG.DE) to a controlling majority.
The market may also need to absorb the remaining half of Qatar's preferred stock in VW. Shares have not moved above 70 euros since the Gulf state placed 1.5 billion euros worth of shares on the market in November.
Credit Suisse said MAN shares, down 0.1 percent by 1400 GMT, could come under pressure after the bond was announced since it signals VW may wait with a full takeover offer.
"We assume that VW regards the current share price as too dilutive for a significant rights issue. This might create some disappointment amongst market participants that were hoping for a fast 'truck solution', i.e. speculation regarding a bid for MAN might slow down," the Swiss bank told clients.
TOYOTA IN SIGHTS
VW Chief Executive Martin Winterkorn said the Suzuki alliance represented a "further quantum leap" for his company that was of "paramount significance" to both carmakers.
"We have set up a joint project office here in Wolfsburg to coordinate cooperation. Work on concrete ideas and vehicle projects will begin in the coming weeks," he told reporters.
Winterkorn said VW remained in a good position to implement its heavy truck strategy with its controlling interest in Scania (SCVb.ST) and its near 30 percent holding in MAN.
"Step by step we will be harnessing openings for cooperating in the fields of development and components," he said.
Volkswagen last year turned the tables on predator Porsche SE, which had to sack its vaunted management team after their failed attempt to acquire VW brought family-owned Porsche to the brink of collapse and made it accept a merger with VW next year.
With Porsche, the 10th horse in VW's stable of high-powered motoring brands which include Bentley and Lamborghini, Volkswagen is focusing its efforts on overtaking Toyota as the world's largest carmaker by 2018.
Volkswagen aims that year to sell over 10 million vehicles and post a group pretax profit margin of more than 8 percent.
(Editing by David Cowell)
- Tweet this
- Share this
- Digg this