Porsche has been listed on the Frankfurt Stock Exchange, with a valuation of around 78 billion euros (A$117.84bn) that’s lead the company to call it the largest initial public offering (IPO) by market capitalisation in Europe.

    This claim is based on the calculated value of the offer price for the preferred shares, and the corresponding value for the common shares.

    Preferred shares are priced at 82.50 euros (A$124.64) and listed on the Frankfurt Stock Exchange under the trading symbol P911.

    The Volkswagen Group is placing 113,875,000 of its non-voting preferred bearer shares in the IPO, including 14,853,260 preferred shares to cover over-allotments.

    This represents 25 per cent of its preferred shares and 12.5 per cent of Porsche AG’s issued and outstanding share capital.

    7.7 per cent of preferred shares will go to private investors, though Porsche says the offer was oversubscribed and not all purchase orders from retail investors could be considered in full.

    Porsche says the IPO “opens up greater entrepreneurial freedom” for the company.

    The current domination and profit and loss transfer agreements with Volkswagen will expire at the end of 2022, to be replaced with an industrial cooperation agreement “on an arm’s length basis” that will govern their future relationship.

    Porsche’s IPO will also see Volkswagen AG potentially generate gross proceeds of between 9.4 billion and 10.1 billion (A$14.19-15.25bn) euros.

    Volkswagen AG will convene an extraordinary general meeting in December 2022 to propose to its shareholders the distribution of a special dividend of 49 per cent of the total gross proceeds in 2023.

    “Today, a big dream comes true for Porsche. Our increased degree of autonomy puts us in a very good position to implement our ambitious goals in the coming years,” said Porsche CEO Oliver Blume.

    “We aim to redefine the concept of modern luxury by combining luxury with sustainability and social commitment. Porsche wants to grow with its luxury products and services and assume social responsibility.”

    Porsche wants 80 per cent of all its vehicles to be EVs by 2030, and is working towards a net carbon-neutral value chain in 2030 plus a net carbon-neutral use-phase for its future EVs.

    “We aim to inspire customers and fans around the world – with successful products and compelling financial performance. We want to share this passion with investors, and we are excited about welcoming those who have become a part of our unique Porsche family in this way,” says Lutz Meschke, deputy chairman of Porsche AG’s executive board and member of the executive board for finance and IT.

    “Together, we are working with determination to implement our long-term strategy. Here, we can leverage the best of both worlds: the advantages of our luxury positioning and the synergies with the Volkswagen Group.”

    Porsche says it’s in a robust financial position and expects an operating return on sales of between 17 and 18 per cent for this calendar year, and in the medium term is targeting similar 17 to 19 per cent returns with the aim of reaching 20 per cent.

    In the years to come, it wants to improve its EBITDA (earnings before interest, taxes, depreciation and amortisation) margin to 25 to 27 per cent.

    Among its investors, the Qatar Investment Authority has previously committed to buy 4.99 per cent of the preferred shares as a cornerstone investor, with other such investors including Norges Bank Investment Management, T. Rowe Price and ADQ.

    The Porsche-Piech family – through Porsche Automobil Holding SE – will acquire 25 per cent plus one of Porsche’s ordinary voting stock, giving the Porsche-Piech clan a blocking minority stake in their namesake marque.

    William Stopford

    William Stopford is an automotive journalist based in Brisbane, Australia. William is a Business/Journalism graduate from the Queensland University of Technology who loves to travel, briefly lived in the US, and has a particular interest in the American car industry.

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