Volkswagen shareholders approve issue of 135 million shares

HAMBURG: European auto giant Volkswagen Aktiengesellschaft today said its shareholders have approved the proposal for issuing 135 million new preference shares, a move aimed at ensuring greater financial flexibility prior to the company's proposed merger with Porsche AG.

The move will pave the way for capital increase planned for the first half of 2010, the group said in a statement.

The move is intended to give "the financial flexibility needed to grow the integrated automotive group and also ensure appropriate liquidity and a healthy financing structure for Volkswagen AG after all the steps in the transaction concerning the merger with Porsche have been completed."

In the next few weeks, Volkswagen group is expected to take a 49.9 per cent stake in Porsche AG.

The final merger deal between the two auto firms is planned for 2011.

"The combination of Volkswagen and Porsche to form a group with ten strong brands follows a compelling strategic, industrial and financial logic," the statement said.