Volkswagen Gains as Porsche IPO Discussion Boosts Hopes of Investing.com Value Appreciation

©Reuters.
By Dhirendra Tripathi
Investing.com – Shares of Volkswagen (DE:) rose 4.5% in German trading on Tuesday after the company said it was considering an IPO Porsche .
The IPO of Volkswagen’s most profitable asset is expected to boost the valuation of the world’s second largest automaker and help it take over Tesla (NASDAQ:) in the electric vehicle market.
VW and the family holding company Porsche Automobil Holding have negotiated a framework agreement that is intended to form the basis for preparing for a possible IPO, the company said in a statement.
“The conclusion of the framework agreement is subject to the approval of the Executive Board and Supervisory Board Volkswagen AG (OTC:). A final decision has not yet been made,” said Volkswagen.
Europe’s largest automaker has a convoluted shareholder structure that limits its ability to raise fresh equity. It relies on its own cash, which the company generates, or on bonds and loans. A Porsche listing will give him a new avenue to raise funds.
The listed Porsche Automobil Holding (DE:) is separated from the sports car business. It was created more than 10 years ago when Porsche was trying to take control of a much larger VW. The attempt imploded when the 2008 financial crisis led to a financial crisis and the sports car business came under the VW Group and Porsche SE remained a separate legal entity.
fusion media or anyone else associated with Fusion Media shall have no liability for any loss or damage arising from reliance on any information contained on this website, including data, quotes, charts and buy/sell signals. Please educate yourself fully about the risks and costs associated with trading the financial markets as this is one of the riskiest forms of investment of all.