Volkswagen will go ahead with its plan to list a minority stake in sports car maker Porsche this year despite market volatility, paving the way for what could be one of Europe’s biggest initial public offerings.
The manufacturer is planning the IPO at the end of September or the beginning of October, subject to further developments in capital markets, VW said on Monday after a meeting of its supervisory board.
Europe’s biggest car maker wants to finalise the listing by the end of the year.
“This is a historic moment for Porsche,” VW and Porsche chief executive Oliver Blume said.
“We believe that an IPO would open a new chapter with greater independence for us as one of the world’s most successful sports car manufacturers.”
With the share sale, the billionaire Porsche and Piech clan are set to regain direct influence over what used to be their family enterprise, about 13 years after they were forced to sell the sports car business to Volkswagen.
More than a decade ago, Porsche Automobil Holding tried to take over control at the much larger VW, but the move failed when funding dried up during the financial crisis.
As part of the IPO, VW and Porsche plan to end a so-called domination agreement that transfers profit and losses to the parent by the end of the year, to be replaced with a co-operation agreement.
While more sway over Porsche is on the cards for the family, VW hopes to yield funds that will help bolster its ambitious investment plans in electric models and ground-breaking digital features.
The plan is contending with some of the most challenging market conditions in years, with a slowing economy, rampant inflation and surging energy costs largely bringing public listings to a standstill.
Investors will be able to purchase preferred shares in Porsche that do not carry voting rights, while the family, who hold a 53 per cent voting stake in VW through their investment company Porsche Automobil Holding, are set to buy a blocking minority stake of 25 per cent plus one share.
The remaining voting stock will stay with VW.
Despite market challenges, Porsche has lined up investor interest for its IPO at a valuation of as much as €85 billion ($84bn), sources said last month.
The maker of the 911 sports car and the electric Taycan has secured orders that exceed the shares on offer at a valuation between €60bn and €85bn, sources said.
Big-name investors including T Rowe Price Group have already indicated interest in subscribing to the IPO in that valuation range, sources said.
On Monday, VW said Qatar Investment Authority planned to buy a 4.99 per cent stake subject to a cornerstone investment agreement.
Porsche has also been gauging interest from billionaires including the founder of energy drink maker Red Bull, Dietrich Mateschitz, as well as LVMH chairman Bernard Arnault, sources said.
VW also plans to offer Porsche's preferred shares to retail investors in countries including Germany, Austria, Switzerland, France, Spain and Italy, the company said on Monday.
Many European and US institutional asset managers that typically invest in major German IPOs have so far shied away from making firm commitments owing to corporate governance concerns.
But Porsche still has enough demand to nearly fill the so-called shadow order book at the top end of the range and is oversubscribed at the lower end, sources said.
The family’s heritage harks back to Wolfgang Porsche’s grandfather Ferdinand Porsche, who created the VW People Car that later became the Beetle.
Ferdinand’s son Ferry established the sports car operations. The first vehicle to bear the Porsche name was registered in 1948, which was the 356 “No.1” Roadster.