VW trucks division Traton skids on stock market launch
Frankfurt am Main (AFP)
Shares in Volkswagen's heavy trucks division Traton slid in their first minutes of trading in Frankfurt Friday, although the group was spared the abrupt tumbles that have met some IPOs this year.
Stock in the group, which is also listed in Swedish capital Stockholm, fell from the starting price of 27 euros ($30.70) to 26.48 euros around 9:35 am (0735 GMT).
VW had already set the price tag for the 57.5 million shares on offer -- an 11.5-percent stake -- at the very bottom of the range it first mooted weeks before, valuing the company at 13.5 billion euros.
The flotation should bring in around 1.5 billion euros.
Traton brings together well-known brands MAN (Germany) and Scania (Sweden) as well as VW-branded trucks sold in South America and Africa.
"The Traton flotation means the second-largest IPO in Europe so far this year has taken place in Germany" after Italian payment processor Nexi, EY analysts commented in a note ahead of the stock market opening.
Worldwide, it was the fifth-largest stock market launch so far in 2019, EY added.
Traton sold some 233,000 vehicles in 2018, with its 81,000 employees bringing in almost 26 billion euros in revenue.
VW had originally slated the flotation for April, but announced in March that it would hold off as market conditions looked unfavourable.
What's more, it has scaled back the size of the stake on offer, from a first-mooted 25 percent float aimed at raising up to six billion euros.
Friday's cash infusion will help the parent company stem the costs of the massive investments needed as it transitions to electric drive in lighter vehicles.
The flotation could also be a first step towards simplifying the sprawling group with 640,000 employees.
? 2019 AFP