Berlin - Volkswagen's
supervisory board is meeting on Wednesday to approve a draft
$4.3 billion settlement with the US Justice Department, a key
milestone in its attempts to recover from its emissions test
cheating scandal.
Shares in Europe's biggest carmaker rose more than 2 percent
in early trading as investors welcomed the latest move to draw a
line under the biggest business scandal in its 80-year history.
However, some said the 16-month saga could still have
further to run, with US authorities investigating who was
individually responsible for the cheating and Volkswagen (VW)
facing probes and lawsuits in Europe and elsewhere.
"This is a partial victory, but VW is by no means out of the
woods yet," said Ingo Speich, a fund manager at Union Investment
which holds about 0.6 percent of VW preference shares. "There
are still considerable litigation risks."
"Facts need to be revealed now and, if necessary, further
steps need to be taken regarding individuals to regain the trust
of capital markets," Speich added.
VW said after the market close on Tuesday it was in advanced
talks over a civil and criminal settlement with the US Justice
Department over its diesel emissions test cheating, and planned
to plead guilty to criminal misconduct.
It warned the deal exceeded the 18.2 billion euros ($19.2
billion) it has set aside to cover the costs of its wrongdoing,
and it has yet to quantify the impact on its 2016 group results.
The settlement will allow investors to refocus on VW's
fundamental business, though there is uncertainty over the total
cash required given exchange rate moves and the number of diesel
cars VW may need to repurchase, Barclays analysts said in a
note, keeping an "overweight" rating on the stock.
Read also: VW must face U.S. investor lawsuit in emissions scandal
VW admitted in September 2015 to installing secret software
in hundreds of thousands of US diesel cars to cheat exhaust
emissions tests and make them appear cleaner than they were on
the road, and that as many as 11 million vehicles could have
similar software installed worldwide.
Despite the scandal, the group said on Tuesday it notched up
record sales last year, led by premium brands Audi and Porsche,
though analysts say it may have offered big discounts on VW
brand cars which have suffered most from the crisis.
At 0955 GMT, VW shares were up 2.2 percent at 149.55 euros,
up sharply from their low of 86.36 euros after the scandal
broke, but still short of pre-crisis levels above 160 euros.
Most analysts had expected the U.S. deal, which VW has raced
to conclude before the Obama administration bows out on January 20,
to cost the carmaker around 3 billion euros.