By Christoph Rauwald
STUTTGART--Porsche Automobil Holding SE (PAH3.XE) said Monday it
wants to complete the sale of the remaining 50.1% stake in its
sportscar business to Volkswagen AG (VOW.XE) as fast as possible
once all examinations have been finalized and dismissed allegations
by politicians that a tax-free deal before August 2014 would be
disadvantageous for German tax payers.
"The opposite is true: the state would benefit significantly
through higher tax income," Porsche Chief Executive Martin
Winterkorn said in a prepared speech at the German firm's
shareholder meeting. Winterkorn is also CEO at Volkswagen.
Porsche can sell the stake tax-free to Volkswagen in August 2014
by exercising a call option, but Winterkorn noted waiting that long
"doesn't help anyone involved". He said the companies would be able
to reap more economies of scale faster through an earlier deal, and
higher earnings would lead to higher tax payments before August
2014.
VW already owns a 49.9% stake in Porsche's sportscar business
and wants to take over the remaining 50.1% to leverage more
economies of scale after the plan for a fully-fledged merger
including Porsche's holding firm had to be abandoned last year due
to legal obstacles.
Several institutional investors in Germany and the U.S. filed
lawsuits seeking damage claims worth billions of euros in total for
alleged market manipulation during Porsche's ill-fated attempt to
take over much-larger Volkswagen. Porsche's attack collapsed in
2009 when credit markets dried up during the financial crisis,
which triggered huge volatility in VW stock and finally the
departure of Porsche's previous management.
The first court hearing for one of the pending lawsuits is
scheduled June 27 at a regional court in Brunswick in northern
Germany.
In August 2009, Porsche agreed to sell a 49.9% stake in its
sports-car unit to Volkswagen as part of a complex deal to forge a
combined company under VW's leadership. At the time, Porsche and
Volkswagen mutually granted each other options to transfer the
remaining 50.1% stake to Volkswagen if the initial plan for a
merger including Porsche's holding firm doesn't work out.
Volkswagen is expected to close in on a deal in coming months to
acquire the rest of Porsche's sportscar unit for about 4.5 billion
euro ($5.65 billion) and bypass a potential tax charge of around
1.5 billion euro. Thanks to a legal loophole, the tax payment can
possibly be avoided if VW transfers one voting share to Porsche
along with the purchase price as the deal would then be viewed by
tax authorities as a reshuffle instead of an outright sale. The
loophole drew wide-ranging criticism among German politicians in
recent weeks, who expected the state to benefit from a larger tax
bill.
On Monday, Porsche shareholders will approve a change of the
corporate statutes to reflect a broader investment brief. After
paying back its remaining bank debt Porsche aims to use the
proceeds from the planned sale of its sports-car division for
investments in other automotive assets.
Porsche's available liquidity "should mainly be used for further
activities focusing on the automotive value chain," Winterkorn
said.
The Porsche and Piech families control 90% of Porsche's voting
stock, which essentially makes any votes at annual general meetings
a formality.
Winterkorn noted, however, that Volkswagen will remain the core
investment of Porsche's holding firm, which still holds a 50.7%
majority stake in Europe's largest auto maker by sales following
its failed bid.
Winterkorn said the market environment for the global car
industry has worsened amid persistent economic uncertainties,
particularly triggered by the sovereign-debt crisis in Europe. But
he said he remains optimistic for both Porsche and Volkswagen in
coming months as the two car makers will benefit from the launch of
important new models.
-Write to Christoph Rauwald at
christoph.rauwald@dowjones.com