Porsche CFO says only major geopolitical event will stop IPO

Volkswagen triggered a listing of sports car brand Porsche AG late on Monday after months of deliberation, but cautioned the move was still subject to market developments

Porsche will only backtrack on its stock market debut in the event of severe geopolitical problems that would make the importance of a listing fade in comparison, the sports car brand's chief financial officer said on Tuesday.

You never know what will happen regarding geopolitical issues, but if a potential IPO would be stopped now, we are talking about severe problems, Lutz Meschke said on a media call.

By then, a potential IPO would not be a real issue, he added.

Volkswagen triggered a listing of sports car brand Porsche AG late on Monday after months of deliberation, but cautioned the move was still subject to market developments.

In a media call on Tuesday, Porsche and now also Volkswagen Chief Executive Oliver Blume said the listing could help revive capital markets hit by slowing global growth.

There is a lot of capital in the market, Blume said. We think the Porsche IPO could be an icebreaker.

Investors estimate a valuation for Porsche AG anywhere between €60 billion (£51.44 billion) and €85 billion (£72.88 billion).

Volkswagen and Porsche executives declined to comment on what valuation they expect, stating only they believed Porsche would be attractive to investors even in such turbulent times.

If a company is able to succeed under these difficult market conditions, it is Porsche, Meschke said.

Porsche is a money-maker for the Volkswagen Group, with operating profits up 22% in the first half of the year compared to an 8% fall at the mass market Volkswagen brand.

A higher valuation would make Volkswagen shares more attractive. But it would leave the group's top shareholder Porsche SE, which will take 25% plus one share of ordinary Porsche AG shares at a 7.5% premium, needing significant financing to fund its portion of the sports car brand's shares, Bernstein analyst Daniel Roeska said in a research note.

Asked how conflicts of interest for Blume - who will remain chief of both companies even after a listing - would be handled, the CEO said Porsche AG's executive board would have the authority to make decisions "100% on its own".

Volkswagen and Porsche SE shares were both up around 1% at 0844 GMT, at €144.94 (£124.29) and €70.05 (£60.07) respectively.