Volkswagen may issue preferred shares to help raise money to deal with its growing diesel scandal, Reuters reported.
The German automaker may cut costs and boost cash flow before resorting to offering parts of the company to outside investors. According to the report, VW may find some willing investors to help bail the company out of its dire straights thanks to its healthy balance sheet and assets. However, if no one is willing to take the bait, the company may resort to more extreme cash-raising strategies that include selling ordinary stock, or even perhaps selling off some of its brands.
Reuters reported that sources said Volkswagen wasn't considering selling any of its brands now. Fiat Chrysler Automobiles spun off luxury carmaker Ferrari this year, in part, to raise capital for other investments at the global automaker.
"The company has a fairly robust balance sheet — but also has a very conservative approach to financing and its credit rating," Bernstein analyst Max Warburton said in a statement according to Reuters. "We believe that if the cash costs exceed 10 billion euros, a capital raise is highly likely."
In the analyst's note, Warburton said that VW had roughly €17.6 billion in cash on hand already, but it would take about €10 billion in net cash to run day-to-day operations. Volkswagen said it would set aside €6.5 billion to help pay for the scandal.
Already, Volkswagen announced it would cut a shift at one of its engine plants and freeze hiring within its finance department to control costs. It's unclear what other measures the automaker may take to save cash.
The post Volkswagen Planning Capital Push to Raise Money For Scandal appeared first on The Truth About Cars.
from The Truth About Cars http://ift.tt/Jh8LjA
Put the internet to work for you.
No comments:
Post a Comment