Volkswagen shares drop on bond placement

Tue Nov 6, 2012 5:44am EST

Logo of German carmaker Volkswagen, is pictured at the IAA truck show in Hanover, September 18, 2012. REUTERS/Fabian Bimmer

Logo of German carmaker Volkswagen, is pictured at the IAA truck show in Hanover, September 18, 2012.

Credit: Reuters/Fabian Bimmer

Volkswagen (VOWG_p.DE) shares fell 3.6 percent to the bottom of Germany's benchmark DAX index .GDAXI after the group said it raised 2.5 billion euros ($3.20 billion) from a convertible bond.

"The ... dilution for shareholders should lead to an equivalent share price decline," a trader says.

Volkswagen said late on Monday it aimed to raise at least 2 billion euros in fresh capital to strengthen its balance sheet by issuing debt that must be converted into non-voting equity in 2015.ž

($1 = 0.7823 euros)

Reuters messaging rm://christoph.steitz.thomsonreuters.com@reuters.net

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