Volkswagen has set the price range for the sale of a minority stake in luxury brand Porsche as it prepares for an initial public offering to finance its investments in new technology such as electric vehicles, software and services.
The German automaker announced it is seeking to place an IPO on the Frankfurt Stock Exchange on September 29 after selling up to 25% non-voting preferred shares in Porsche AG, maker of the 911 sports car and the Cayenne sports van.
The Qatar Investment Authority has agreed to acquire 4.99% and smaller percentages will go to Norges Bank Investment, T. Rowe Price and ADQ.
The price range per share was set at between 76.50 euros (dollars) and 82.50 euros, for a total of between 8,710 million and 9,390 million euros.
Porsche shares have been divided into 50% preferred and 50% common, so that the IPO represents 12.5% of the company.
The deal also includes the sale of 25% plus one of the common shares at a 7.5% premium to Porsche Automobil Holding SE, the Volkswagen shareholder representing the Porsche and Piech families.
At the maximum price, the total amount raised from the sale of both preferred and common shares would be 19.5 billion euros, of which 49% would be distributed as a dividend to shareholders and the rest would be available for company investments.
Volkswagen has launched an initiative to make electric vehicles and says future gains will come from investments in that sector, software and services, as the market for combustion vehicles shrinks.