BERLIN, June 14 (Xinhua) -- German car manufacturer Volkswagen announced on Friday to generate at least 1.5 billion euros (1.7 billion U.S. dollars) from the initial public offering (IPO) of its truck business Traton.
After postponing Traton's IPO around Easter due to weak market demand, Volkswagen will be offering Traton Shares at a price range of 27 to 33 euros, leading to a final valuing of the German carmaker's truck business of up to 16.5 billion euros.
According to Volkswagen, the first day of trading was scheduled for June 28 but the offer was subject to the approval by the German Federal Financial Supervisory Authority (BaFin), which Volkswagen was "expected in the coming days".
"I am pleased that we have reached another milestone on TRATON's route to the IPO. We are now all set for the decisive phase. The IPO is driven by the aim to create value for our stakeholders," commented Frank Witter, chief financial officer of Volkswagen.
Following a successful IPO, Volkswagen is seeking to sell around 50 million shares, leading to a free float of Traton shares between 10 percent and 11.5 percent, the carmaker announced.
Last year, Traton generated revenues of 25.9 billion euros and earned 1.7 billion euros in pretax profits. Volkswagen's truck business includes the brands MAN and Scania, but it also has a 17 percent stake in U.S. truck company Navistar as well as a 25 percent stake in Chinese truck manufacturer Sinotruk.
Sales for both MAN and Scania have picked up more than 20 percent last month, Volkswagen announced on Friday. In May, MAN sold 13,100 trucks while Scania sold almost 10,000.
Andreas Renschler, CEO of TRATON and member the Volkswagen board, said that "we are confident as we are heading for the finishing line. A strong team effort has brought us here. We believe TRATON is an attractive investment, and feedback from investors and analysts strengthens this belief."