Volkswagen could sell a smaller stake in its Traton trucks department than expected if markets are shaken by Brexit, two sources knowledgeable with the matter informed Reuters on Monday.
The automaker has stated it could list up to 25 percent of Traton in a deal expected to raise 5-6 billion euros ($5.7-$6.8 billion) and become Germany’s biggest share offering for 2019.
The sources stated the company is on track to start the listing process prior Easter, but could limit the amount of shares sold if markets are roiled by Britain’s planned departure from the European Union on March 29.
“We do not need to list 25 percent as a first step,” one of the people stated.
Volkswagen (VW) and Traton refused to discuss.
VW is intending to list Traton as part of its drive to construct a global trucks business by combining its MAN and Scania divisions.
Strategies to officially initiate a public offering, known as an intention to float (ITF), are not anticipated until the second half of March, followed by the listing four weeks later, sources knowledgeable with the discussions informed Reuters.
Traton presently has 2.77 billion euros in bank liabilities and 3.22 billion euros in other loans and liabilities as per a company presentation released on Monday.
A flotation could give the business the resources to strengthen its relationship with Navistar, a U.S. truck maker in which it presently owns a 16.85 percent stake.
JP Morgan, Goldman Sachs, Deutsche Bank, and Citi have been employed as global coordinators for the listing.
Traton stated on Monday its adjusted operating profit increased 13 percent to 1.7 billion euros in 2018 due to a Brazilian market recovery, efficiency gains at MAN and a increase in vehicle deliveries.
The business forecast a return on sales of 6.5-7.5 percent for this year, as well as a slight boost in earning and vehicle deliveries, adding efficiency improvements and cost reduction at MAN would continue.
Traton’s 2018 return on sales was 6.4 percent, increasing from 6 percent in 2017, while revenues increased 6 percent to 25.9 billion euros. That was helped by Volkswagen Caminhoes e Onibus, Traton’s Brazilian arm, where a 22 percent increase in revenues fueled a return to an operating profit of 28 million euros.
Traton stated it sold 233,000 vehicles of the MAN, Scania and Volkswagen Caminhoes e Onibus brands, 14 percent over 2017.
“We remain right on track to become a global champion. As a group of strong brands, we create success for our clients and tap synergies together. We are ready to take the next steps,” Traton CEO Andreas Renschler stated.
