Qatar has a 17 percent voting stake in Volkswagen and would take a seat on Porsche's supervisory board, it said on Friday, underlining the more active role Gulf states are playing in the German auto industry. The move has also fuelled expectations that the falling number of freely traded VW ordinary shares could mean they are replaced on Germany's blue-chip index by its preferred shares. After exercising options in Volkswagen - as had been expected by market participants for some time - Qatar Holding LLC now holds 17 percent in Volkswagen's share capital, it said. “As a long-term strategic investor, we continue to believe that the investment in VW and the envisaged combination of Porsche SE and VW represents a unique investment asset for Qatar Holding,” said Ahmad Al-Sayed, CEO of Qatar Holding. Separately, Porsche Automobil Holding SE said Friday that Qatar's Sheikh Jassim Bin Abdulaziz Bin Jassim Al-Thani is set to succeed Hans-Peter Porsche on the German sports-car maker's supervisory board as of Jan. 29. As part of the complex merger between Volkswagen and Porsche, which is due to be finalized in 2011, Qatar has become Volkswagen's third anchor shareholder and acquired a 10 percent voting stake in Stuttgart-based Porsche from the Porsche and Piech owner families. Volkswagen's two largest shareholders are Porsche Holding with a 51 percent stake and the German state of Lower Saxony with a stake of just above 20 percent. Last week, Volkswagen acquired a 49.9 percent stake in Porsche's core sports-car operations for 3.9 billion euros and confirmed that the merger is expected to be finalized in 2011. Porsche will use the 3.9 billion euros mainly to repay liabilities. Porsche tried to take over full control of Volkswagen, but the deal backfired when credit markets collapsed and Porsche's debt ballooned. Volkswagen is now driving the deal. As the next step, Volkswagen plans to buy the Porsche Holding Salzburg retail operations. Porsche's sports-car operations are poised to be integrated into Volkswagen as the company's 10th brand along with nameplates such as Audi, Skoda and Seat. Volkswagen ordinary shares have been a prominent feature of Germany's blue-chip index since its inception in 1987. Expulsion from the index is expected to put pressure on the value of the ordinary shares, which last October traded at above 1,000 euros, making the carmaker temporarily the world's largest by market value. “From our point of view, as of today the free float in VW ordinary shares will fall below the 10 percent threshold,” DZ Bank analyst Michael Punzet wrote in a note. “We expect a positive momentum in the next trading days,” Punzet wrote, referring to the preferred shares. Ordinary shares in the company fell as much as 6.5 percent, recovering to trade 2.43 percent lower at 78.06 by 1528 GMT while the preferred shares rose as much as 4.3 percent, dropping back to trade 1.71 percent higher. In addition, Porsche said - in the invitation to its annual general meeting scheduled for Jan. 29 - it would propose Qatar's Sheikh Jassim Bin Abdulaziz Bin Jassim Al-Thani for a place on its supervisory board. “As a long-term strategic investor, we continue to believe that the investment in VW and the envisaged combination of Porsche SE and VW represents a unique investment asset,” Qatar Holding LLC's Chief Executive Ahmad Al-Sayed said in a statement.
