Porsche kicks off Europe’s biggest float in a decade but costs crunch threatens to slam the brakes on its £65bn hopes

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Volkswagen is pushing ahead with a huge listing of Porsche on the stock market despite investor jitters caused by the economic turmoil in Europe.

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The automaker is hoping Porsche will raise a market valuation of £61-66bn, with bidding starting in Frankfurt at the end of the month.

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It will be the largest listing in Europe in over a decade and the second largest in German history as Porsche aims to raise £8.3bn in an initial public offering (IPO).

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Listing: Porsche is looking to raise a market valuation of £61bn to £66bn, with bidding starting in Frankfurt at the end of the month.

The short float comes at a time of turmoil with hot inflation, rising interest rates and an energy crisis.

Uncertainty has made investors wary of investing their money in companies entering the market.

But a Porsche share issue could jump-start the European stock market after a quiet year. Arno Antlitz, Volkswagen’s chief financial officer, said: “We are now in the home stretch with Porsche and welcome the commitment of our core investors.”

State funds from Qatar, Abu Dhabi and Norway, as well as investment house T Rowe Price, have pledged up to £3.2 billion in Porsche shares.

Volkswagen plans to offer investors 25% of so-called “preferred” non-voting shares in Porsche. This will bring in up to £8.3bn, with shares priced between €76.50 (£67.07) and €82.50.

The similarly named Porsche SE, Volkswagen’s largest shareholder, which is controlled by the Porsche-Piech billionaire family, will buy 25% plus one of the “common” voting shares.

He pledged to pay the IPO price plus a 7.5% premium, netting Volkswagen another £8.9bn. The deal will return control to the Porsche-Piech industrial family after more than a decade.

Their influence has raised management concerns, as has the fact that Volkswagen chief Oliver Blume will remain as chief executive of Porsche.

In total, Volkswagen is set to raise up to £17.2bn from the IPO and plans to distribute 49% of that amount to its shareholders in the form of a special dividend.

The company will spend the remainder on increasing electric vehicle production and investing in software.

With money raised from investors in dollars, Porsche’s $9.4 billion listing will be the largest since Glencore raised $10 billion in 2011, nearly double the amount the companies raised in IPOs this year.

With a market cap of £66bn, Porsche will be worth almost as much as its entire parent company, Volkswagen.

Credit: www.dailymail.co.uk /

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