VW's controlling clan to discuss on Monday whether to block dividend: sources

Tue Jun 14, 2016 11:57am EDT
 
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By Andreas Cremer and Jan Schwartz

BERLIN/HAMBURG (Reuters) - The company that controls Volkswagen will hold a board meeting on Monday to discuss its strategy for the German carmaker's annual shareholder meeting and decide whether to block its plans to pay a dividend, two people familiar with the matter said.

Members of Porsche SE (PSHG_p.DE: Quote), a holding company for the Porsche and Piech families which controls 52 percent of Volkswagen's (VW) voting shares, have spoken out against VW's proposal to pay a dividend for 2015 when it is still grappling with the fallout of its emissions test cheating scandal.

One of the four family members on VW's (VOWG_p.DE: Quote) 20-member supervisory board warned at a board meeting in April that the Porsche-Piech clan would use its voting power at the June 22 shareholder meeting to block a dividend payment, two people familiar with the matter have told Reuters.

However, that could put them on collision course with other VW shareholders, which are already facing a much lower dividend for 2015 than in previous years.

VW proposed in April a 2015 dividend of 0.11 euros per ordinary share and 0.17 euros per preferred share, down from 4.80 euros and 4.86 euros respectively for 2014.

The company is battling to cut costs and conserve cash after admitting in September to cheating U.S. diesel emissions tests. It has already set aside $18 billion to cover the cost of vehicle refits and a settlement with U.S. authorities, and analysts think there could be more fines and legal costs.

Porsche SE's supervisory board, whose 12 members include chairman Wolfgang Porsche and his cousin Ferdinand Piech, VW's former chairman and chief executive, is planning to meet on Monday, two days before the VW shareholder meeting, to determine its strategy, the people familiar with the matter said.

Porsche SE declined to comment.   Continued...

 
A VW sign is seen outside a Volkswagen dealership in London, Britain November 5, 2015.  REUTERS/Suzanne Plunkett/File photo