Lower Saxony Considers Selling VW Shares

In light of the efforts made to cut the state's budget deficit, Lower Saxony was expected to announce sometime today its decision to sell some of the shares it holds in German manufacturer Volkswagen. Currently, the state holds 20.1 percent of the carmaker.

According to Bloomberg, Lower Saxony aims to raise EUR200 million with the selling of the shares, while maintaining at the same time its voting rights. Currently, the state has the right, under the so-called Volkswagen law, to block any decisions made by the carmaker if found inappropriate.

Such an action was however dismissed by the state, who said through one of its spokesmen it has no intention of lowering its stake “below today's 20.01 percent.”

Selling stock would become an option should the state's shares be increased by the merger between Volkswagen and Porsche. Until the merger is complete, Lower Saxony will maintain the percentage in the German manufacturer, trailing the current majority shareholder, Porsche. The emirate of Qatar, through the Qatar Holding, holds 17 percent of the voting rights.

Qatar became involved with Volkswagen last year, after purchasing some of Porsche's shares in the group. Porsche announced at the time it is selling assets worth billions of euros to Qatar as a way to come back on track after it was crippled by debt.

If Lower Saxony does sell, the emirate will probably get involved in the deal. The fund has already stated its decision to get more involved with the German manufacturer, including at an educational level (joint vocational training and further study courses at Qatar University and the AutoUni in Wolfsburg).