Volkswagen is to seek a potential further €10 billion from shareholders to secure its merger with Porsche and safeguard its financial stability.
Volkswagen plans to ask shareholders next month for authority to issue up to 135 million new preferred shares by December 2014, the carmaker said in a statement today.
Based on the current price of Volkswagen's preferred shares, the total value of the cash call would amount to about €10 billion, though it is likely to be issued at a discount.
"This would allow the Volkswagen Group to maintain its medium-term financial flexibility while at the same time safeguarding its good rating over the long term," it said.
Volkswagen preferred shares fell 4.3 per cent to €74.53 by 0741 GMT, while its ordinary shares were flat at €119.27.
Porsche said in August it would sell a 42 per cent stake in Porsche AG, its healthy sports car business, to VW for €3.3 billion as part of a multi-stage deal to integrate the two companies by 2011.
Volkswagen will also ask shareholders to formalise part-owner Lower Saxony's right to appoint two members of the supervisory board, the company's board of directors.
Volkswagen wants the company's articles of association to incorporate the rights of appointment if Lower Saxony holds at least 15 per cent of the company's ordinary shares.
Volkswagen also wants shareholder resolutions on important decisions to require a majority of more than 80 per cent of share capital represented when the resolution is adopted.
Reuters