Suzuki to Sell all Volkswagen Shares to Porsche, 36.7 Billion yen Profit
Suzuki Motor Corp. has signed a contract to sell all of its shareholdings in Volkswagen AG of Germany as the partnership between them has ended.
Under this deal, Suzuki will sell all 4,397,000 Volkswagen shares that Suzuki possess to Porsche Automobil Holding SE, the parent of Volkswagen, on Wednesday German time. All the shares will be sold to Porsche Automobil Holdings. This is going to generate 36.7 billion yen cash for Suzuki as they bought Volkswagen shares cheaper than the price of it now back in the year 2009.
This ends of the partnership deal happened due to business policy conflicts, Suzuki asked Volkswagen to cancel the partnership. Volkswagen has broken the contract by making scandal with emission test cheating. Volkswagen has acknowledged that 11 million vehicles they created were equipped with software that cheats emission tests for diesel vehicles.
Because of the emission test scandal that Volkswagen carried out, their share price has gone down significantly. However, Suzuki will book the profit of 36.7 billion yen from the sale of Volkswagen share due to grow and increase in price compared to what it was 9 years ago.
The gain on sale will be counted as special profit created between the period of July and September on record of the balance sheet for Suzuki.
On the other hand, the International chamber of commerce ruled that Volkswagen must sell its 19.9% of Suzuki share back to them which costs 460 billion Japanese yen. It was reported that Suzuki has already bought their shares back from Volkswagen on Thursday, 17th of the month.
"This is the best thing we could do. Selling shares today has nothing to do with the rapid drop of the share price. We were doing what we were supposed to do with no delay and it just turned out to be today." said by Osamu Suzuki, chairman of Suzuki.
