Volkswagen has told banks supplying a 20 billion euro ($21.1 billion) credit line that it would sell assets if it finds no other way of repaying the one-year loan, two people familiar with the matter said.
Europe's largest carmaker is under pressure to strengthen its finances as it is expected to have to pay out tens of billions of euros to cover fines, lawsuits and vehicle refits after it admitted to cheating U.S. diesel emissions tests and falsifying carbon dioxide emissions.
The biggest corporate scandal in the German company's 78-year history has forced out its long-time CEO, wiped billions of euros off its market value and hammered its bonds, making it much more expensive for the company to borrow through its traditionally-preferred route of the debt market.
VW secured the 20 billion euro bridging loan from 13 banks this week and is planning to refinance it by issuing bonds over the next couple of months, the sources said.
Under the terms, VW assured the lenders it would sell or list assets worth up to significantly more than 20 billion euros if it fails to find other sources of money, the people said.
Volkswagen declined to comment.
"No specific assets have been discussed," one of the people said, while another person said a potential emergency rights issue was also an option.
Investment bankers are pitching ideas to Volkswagen on potential ways to raise money, though decisions are unlikely before more clarity on the scope of penalty payments and recall costs have emerged, the people said.
Listings of divisions such as Audi, Porsche or its truck business - which is being carved out now - seem unlikely, but the non-truck parts of VW's MAN subsidiary are expected to be at the top of the list of potential divestments, the people said.
The MAN power engineering operations, whose products include ship engines, mini power plants, special gear units, propulsion components and testing systems may be valued at 4-5 billion euros in a potential deal, the people said.
The division accounted for all of MAN's 101 million euro nine-month operating group profit and for more than a quarter of its 9.98 billion in sales.
"Volkswagen may also consider divesting luxury car brands Bentley and Lamborghini or motor bike brand Ducati, although these units don't really move the needle," one of the sources said.
Separately, VW said the number of cars whose carbon dioxide (CO2) emissions and fuel consumption have been understated may turn out to be smaller than the 800,000 announced last month. VW has said it expects costs of at least 2 billion euros from the issue.
Investigations into the circumstances of the manipulations and number of affected vehicles have not been concluded yet, "but many CO2 levels have in the meantime turned out to be quite accurately measured," a spokesman said.
VW's Skoda subsidiary said on Thursday initial suspicions that the Czech brand was also affected by the CO2 malfeasance have turned out to be wrong.
Almost 500 lawsuits have been filed in the United States against VW, Audi and Porsche since the emissions scandal became public on Sept. 18, Germany's Sueddeutsche Zeitung and broadcasters NDR and WDR said on Thursday, without citing the source of the information.
Reuters
Fri Dec 04 2015
VW secured the 20 billion euro bridging loan from 13 banks this week and is planning to refinance it by issuing bonds over the next couple of months.
Niaga AWANI: Ringgit dijangka sekitar 4.77 berbanding dolar AS minggu ini
Pengarah Urusan SPI Asset Management Stephen Innes berkata ini bagaimanapun bergantung kepada reaksi pasaran bon global memandangkan ramai peniaga memberi tumpuan terhadap pelarasan oleh Rizab Persekutuan AS (Fed).
Mustapa Mohamed terima anugerah daripada kerajaan Jepun
Mustapa dianugerahi Grand Cordon of the Order of the Rising Sun daripada Kerajaan Jepun atas sumbangan beliau dalam hubungan Jepun-Malaysia.
Niaga AWANI: Bursa Malaysia dijangka diniagakan dalam jajaran kecil minggu ini
Naib Presiden Penyelidikan Ekuiti Rakuten Trade Sdn Bhd, Thong Pak Leng berkata beliau meramalkan paras sokongan segera pada 1,555, diikuti dengan 1,545.
Niaga AWANI: Cabaran jurang negara kaya dan membangun
Editor Astro AWANI, Najib Aroff menemu bual Mirek Dusek yang merupakan Pengarah Urusan, World Economic Forum (WEF) berkait fokus serta tumpuan Mesyuarat Khas WEF serta jurang negara kaya dan membangun.
AWANI Pagi: Sokongan & peluang pekerjaan untuk komuniti Autistik
Sempena sambutan Bulan Autisme Sedunia pada April, ikuti diskusi bersama Beatrice Leong, Autistik, Aktivis dan Pengasas Persatuan Kesejahteraan Autisme mengenai ekosistem sokongan untuk pekerjaan individu autistik di Malaysia.
Letupan bom Sungai Golok: Penduduk Rantau Panjang turut rasai gegaran
Selain letupan seorang saksi mendakwa turut mendengar insiden berbalas tembakan di kawasan berkenaan.
Niaga AWANI: FOMC Mei 2024 bermula esok, apakah jangkaan keputusan The Fed?
Pasaran kini menjangkakan kadar faedah akan dikekalkan pada mesyuarat Jawatankuasa Pasaran Terbuka Persekutuan (FOMC) seterusnya iaitu pada 1 Mei ini. Adakah ini akan menepati jangkaan pasaran? Perbincangan bersama Ketua Ekonomi, Bank Muamalat Malaysia Bhd, Dr Mohd Afzanizam Abdul Rashid.
Delegasi Hamas ke Kaherah bincang gencatan senjata
Hamas dijangka bertindak balas terhadap cadangan genjatan senjata berperingkat terbaharu Israel yang disampaikan pada Sabtu lalu.
14 rumah terjejas ribut landa Kuala Muda
Antara kawasan lain yang terlibat ialah Kampung Teluk Wang Besar, Kampung Teluk Wang Kechil, Kampung Bukit dan Kampung Masjid.
Manfaatkan teknologi AI dalam sektor pendidikan
Perbincangan diperlukan mengenai cara-cara untuk mengintegrasikan AI ke dalam sistem pendidikan secara berkesan.