If you turn the pages of recent history back just a bit, you may recall that in 2009 Porsche attempted – and later failed – to acquire Volkswagen, pouring roughly 14 billion into the effort. Following the sportscar maker’s botched attempt to buy up control of the more plebeian VW, the former target switched roles and purchased $4.12 billion in Porsche shares in December 2009, giving VW a 49.9 percent stake in Porsche.
Because of Porsche’s failed takeover attempt, the automaker has several billion dollars in debt that it needs to pay down, including a $3.5 billion bank loan that comes due in June, according to Automotive News Europe. To address the debt, Porsche has announced that it will begin a $7 billion share sale on March 30.
Details of the share sale include limiting the ability to purchase shares to existing stock owners, which will be limited to .75 shares per existing share owned. The pricing of the shares – half of which will be common, and half preferred – was determined from the preferred share closing price as of March 25 at 56.22 euros. The sale price of the new stock to be issued was then discounted 32 percent to 38 euros per share.
Following the sale, Porsche says it should have roughly $2.1 billion of debt remaining.
References
1.’Porsche to start $7…’ view
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