Big VW shareholder urges foreign capital

• Source: China Daily
• [11:22 May 20 2009]
• Comments

Volkswagen AG, Europe's biggest carmaker, and Porsche SE should sell a stake in the company resulting from a merger to a foreign investor, according to Germany's Lower Saxony, the VW shareholder with veto power.

The German state has no intention of increasing its 20 percent stake in VW after the carmaker's planned combination with Porsche, Lower Saxony Prime Minister Christian Wulff said late Monday in Volkswagen's hometown of Wolfsburg. About 30 percent of the new company will be available to investors once the owners sort out its structure, he said.

"This is a considerable portion that would be open to many possible investors," Wulff, 49, said. "We're open to those investors. Lower Saxony's role will remain the way it is now."

Talks between the automakers to hash out details of a merger were put on hold after Volkswagen Supervisory Board Chairman Ferdinand Piech challenged Stuttgart, Germany-based Porsche's finances and Bernd Osterloh, VW's works council chief, asked to quit the negotiations.

Porsche workers demonstrated yesterday against a combination with VW and demanded independence. The Porsche and Piech families together control 50 percent of Porsche, which in turn owns 51 percent of Volkswagen.

Under Germany's so-called Volkswagen law, Lower Saxony, which owns 20 percent of Volkswagen as its second-largest stakeholder, may block major decisions by the carmaker.

Late yesterday, Reuters reported that Porsche was conducting "promising talks" with a potential investor.

The Reuters report said that according to a person familiar with the matter, these talks reached into the Middle East.

(Bloomberg News)