Volkswagen gets shareholders' nod to raise capital

Volkswagen says that 98.7 per cent of the votes cast at its shareholders' extraordinary general meeting yesterday in Hamburg, Germany, went in favour of granting management the right until December 2014 to issue up to 135 million fresh preferred shares.

The German carmaker's shares are almost entirely held between the Porsche and Piech families, the German state of Lower Saxony and the Gulf state of Qatar.

"The path is now free for a planned capital increase in the first half of 2010 with subscription rights for all shareholders," Volkswagen said in a statement.

VW added that by a motion passed at the EGM, Lower Saxony has been granted the right to directly appoint two representatives of its choice to the VW supervisory board so along as they control 15 per cent of the votes.

The approval means the Porsche and Piech family's listed automotive holding Porsche SE would be forced to deconsolidate Volkswagen from its accounts and revalue its 50.1 per cent voting stake at current prices.

Europe's largest carmaker may acquire a 49.9 per cent stake in Porsche SE's automotive unit next week as it takes the first step toward gradually merging the two manufacturers.