[Asia Economy Reporter Yujin Cho] Germany's Volkswagen Group has approved the initial public offering (IPO) plan for its sports car brand Porsche and is expected to announce it soon. Despite the market downturn caused by the worsening energy crisis in Europe triggered by Russia, Volkswagen Group stated that "discussions on the listing are progressing smoothly."
According to major foreign media on the 5th (local time), Volkswagen's management and supervisory board are expected to make a final decision on the long-awaited Porsche listing by Volkswagen's executives and board of directors and announce it soon.
The Volkswagen supervisory board is scheduled to discuss the timing of Porsche's listing as early as that day.
According to the U.S. financial media CNBC, the official announcement of the listing by Volkswagen Group and Porsche is expected by the end of this month or early next month. However, sources said that the listing could be delayed or canceled depending on the decisions of the management or supervisory board and the development of the stock market situation.
Porsche's corporate value is estimated to be between 60 billion and 85 billion euros (approximately 82 trillion to 116 trillion KRW). If Porsche is listed at the top end of the valuation at 85 billion euros, it would be the largest IPO in German history and the biggest in Europe since 1999, according to financial information provider Refinitiv.
Inside and outside the market, there are concerns about external negative factors such as the sluggish European stock market, high inflation, and the energy crisis caused by Russia's suspension of gas supplies to Europe, leading to evaluations that it is a risky time to debut on the stock market.
According to the German Automobile Association, the number of passenger car deliveries in Europe this year is expected to decrease by 4% compared to the previous year, indicating that sales recovery to pre-COVID-19 pandemic levels is not anticipated.
However, Stifel Financial in the U.S. analyzed that since Volkswagen is investing 52 billion euros in electric vehicle development by 2026, Porsche's listing will help raise the necessary funds, making this IPO clearly positive for shareholders.
According to Bloomberg News, Volkswagen stated that Porsche's planned IPO is progressing smoothly.
Arno Antlitz, Chief Financial Officer (CFO), said in a statement released on the company's intranet that day, "(The listing) is proceeding as planned," adding, "The inflow of funds from the listing will provide us with more flexibility to accelerate our transformation."
Porsche is a German automobile manufacturer under Volkswagen Group, producing sports cars, supercars, and sport utility vehicles (SUVs). Volkswagen and Porsche Automobil Holding SE (Porsche SE) reached a basic agreement on Porsche's listing plan last February.
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