Porsche IPO May Be Stalled Over Russo-Ukrainian War
Despite news that Volkswagen Group’s largest shareholder is eager to list the Porsche brand, rumors are swirling that the plan might be delayed over the conflict in Eastern Europe. VW and Porsche SE have openly shared their desire to launch the initial public offering (IPO) in the fourth quarter of 2022. However Porsche Automobil Holding SE’s finance head has suggested it might not be prudent if Russia is still occupying parts of Ukraine.
“We cannot rule out, if the conflict lasts a longer time, that this could have potential implications on the listing,” CFO Johannes Lattwein recently explained during a press conference held in Berlin, adding that no formal decisions have yet been made.
Porsche SE is controlled by the Porsche and Piech families representing some of Germany’s oldest automotive dynasties. Currently, it’s holding a 31.4-percent equity stake in Volkswagen with little chance of it dumping shares. But listing the sports-luxury brand is assumed to result in a sudden influx of investment capital without forcing anybody to rejigger the management structure of VW Group.
“Due to the leading positioning of Porsche AG in the sport and luxury segment, this attractive investment would diversify our portfolio and our dividend inflows,” Lattwein was quoted as saying by Reuters.
From Reuters:
A framework agreement for the listing proposed by Volkswagen in February includes selling 25 [percent] plus 1 ordinary share in the carmaker to Porsche SE as well as listing up to 25 [percent] of Porsche AG’s preferred stock.
Some 49 [percent] of the IPO proceeds would be paid out to Volkswagen’s shareholders as a special dividend.
“Porsche SE thereby supports the plans of Volkswagen AG to expand its financial flexibility and accelerate the technological transformation of the group,” Porsche SE said in a statement reporting its annual results.
My guess is that leadership is worried that a prolonged conflict in Ukraine will only worsen the state of the market, suppressing prospective investments into a high-end automotive brand. Porsche SE doesn’t seem interested if the listing isn’t looking like a sure-fire success. But that’s speculation on our part, as nobody working within VW Group seems ready to give any benchmarks for what it might take to cancel a late-2022 IPO.
[Image: Tishomir/Shutterstock]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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> " Porsche SE doesn’t seem interested if the listing isn’t looking like a sure-fire success." An IPO is never a sure-fire success.
Porsche cars will be much better when their priority is shareholder returns. Everything is.