Porsche SE to discuss dividend

The company that controls Volkswagen will hold a board meeting on Monday to discuss its strategy for the German carmaker’s annual shareholder meeting and decide whether to block its plans to pay a dividend, two people familiar with the matter said.

Members of Porsche SE, a holding company for the Porsche and Piech families which controls 52% of Volkswagen’s voting shares, have spoken out against VW’s proposal to pay a dividend for 2015 when it is still grappling with the fallout of its emissions test cheating scandal.

One of the four family members on VW’s 20-strong supervisory board warned at a board meeting in April that the Porsche-Piech clan would use its voting power at the June 22 shareholder meeting to block a dividend payment, two people familiar with the matter have told Reuters.

However, that could put them on collision course with other VW shareholders, which are already facing a much lower dividend for 2015 than in previous years.

In April, VW proposed a 2015 dividend of €0.11 per ordinary share and €0.17 per preferred share, down from €4.80 and €4.86 respectively for 2014.

The company is battling to cut costs and conserve cash after admitting in September to cheating US diesel emissions tests.

It has already set aside $18bn to cover the cost of vehicle refits and a settlement with US authorities, and analysts think there could be more fines and legal costs.

Porsche SE declined to comment.