December 3, 2009 / 10:16 PM / 8 years ago

Volkswagen gets okay to issue 135 mln pref shares

FRANKFURT, Dec 3 (Reuters) - Ordinary shareholders in Volkswagen (VOWG.DE) voted nearly unanimously to approve a capital increase that could flood the market with new preferred shares and more than double that class of stock capital.

Late on Thursday, 98.7 percent of the votes cast at VW's extraordinary general meeting in Hamburg were in favour of granting management the right until December 2014 to issue up to 135 million freshly created preferred shares.

Virtually all of the ordinary shares are held by the Porsche and Piech family, the German state of Lower Saxony and the Gulf nation of Qatar.

"The path is now free for a planned capital increase in the first half of 2010 with subscription rights for all shareholders," Volkswagen said in a statement.

VW added that a motion passed at the EGM granting Lower Saxony the right to appoint directly two representatives of its choice to the VW supervisory board so long as they control 15 percent of the votes.

This approval will mean that the Porsche and Piech family's listed automotive holding Porsche SE (PSHG_p.DE) will be forced to deconsolidate Volkswagen from its accounts and revalue its 50.1 percent voting stake at current prices.

Porsche SE warned this would lead to a considerable book loss that will be only partially compensated by the disposal of a 49.9 percent stake in its sports car business to VW.

On balance, these effects will lead to charges against earnings in the "low single-digit billion euro range" in the current fiscal year to July 2010. [ID:nGEE5AO1MC]

The 105 million non-voting preferred shares (VOWG_p.DE) presently in circulation finished the trading session on Thursday up 1.7 percent at 62.70 euros.

Reporting by Christiaan Hetzner; Reuters Messaging:; +49 69 7565 1249

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