IAA CAR SHOW Porsche has secured financial derivatives to hike VW stake UPDATE

IAA CAR SHOW Porsche has secured financial derivatives to hike VW stake UPDATE

	Published : Tue, 11 Sep 2007 14:46 By : Agencies Print this Story

(updates with more comments)

FRANKFURT (Thomson Financial) - Porsche AG CEO Wendelin Wiedeking said his company has secured a 'sufficient' amount of financial instruments and derivatives to allow it to increase its current 31 pct stake in Volkswagen AG to significant levels.

Speaking to reporters on the sidelines of the IAA Car Show, Wiedeking said: 'We have all the options (financial instruments and derivatives) secured... We have sufficient options that would enable us to increase our stake significantly.'

He said the timing of increasing the Porsche shareholding in VW depends on the decision of an EU court with regards to the 'Volkswagen Law'.

Analysts have expected the EU court to make its decision in October or November this year and that the decision would be to declare the Volkswagen Law as illegal.

The law stipulates that a shareholder in VW can hold a maximum of 20 pct voting rights regardless of the number of shares it possesses.

Wiedeking said if the EU court decides that the law is illegal, 'then the way is free' for Porsche to increase its stake in Volkswagen.

He said if the court decides otherwise, Porsche will contest the decision.

Some German media reports recently have said Porsche plans to increase its stake in VW to 51 pct.

Wiedeking said there are currently no plans to increase capital as Porsche has financed the acquisition of VW shares from existing financial resources.

Last November, Porsche's AGM gave the company authority to increase capital in the next five years.

Commenting on VW's plans to set up a three-way truck alliance with Scania AB and MAN AG, Wiedeking said there are many 'pros' and cons' of such a tie-up but a major aspect that has to be considered is the corporate culture of the companies.

He also said time is needed to examine the best possible way to pursue such a three-way alliance.

marilyn.gerlach@thomson.com

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