Porsche investors approve capital increase

1st December 2010, Comments 0 comments

Porsche shareholders approved late on Tuesday a capital increase worth five billion euros (6.5 billion dollars) as part of a planned takeover by Europe's biggest automaker, Volkswagen.

The operation is expected to be completed by late May, though it could take until late August, and is designed to help Porsche reduce its debt burden of six billion euros ahead of the takeover.

VW already owns 49.9 percent of Porsche and wants to acquire the rest by next year but both companies have warned the deal might face delays.

The financial director of both companies, Hans Dieter Poetsch, told shareholders gathered in Stuttgart, southern Germany, he "could not guarantee the takeover by Volkswagen will take place just after the capital increase."

In addition to tax issues, the operation could be held up by complaints filed by investors against Porsche, charging the company manipulated markets in 2008 when it tried to buy the much larger VW.

Plaintiffs have demanded several billion euros in damages and interest.

VW has nonetheless drafted an alternative plan to ensure it obtains a majority holding in the maker of 911 sports cars and Cayene sports utility vehicles.

The aquisition of Porsche, which would become VW's 10th brand, is aimed at helping the latter overtake Toyota as the world's largest automaker by 2018.

- Dow Jones Newswires contributed to this story -

© 2010 AFP

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