Audi Agrees to EUR800 Million German Fine Over Diesel Emissions -- Update
October 16 2018 - 7:09AM
Dow Jones News
(Updates with background, analysts' comments)
By Max Bernhard
Audi AG (NSU.XE) has agreed to pay an 800 million-euro ($925.8
million) fine handed down by German prosecutors, concluding another
important probe into parent company Volkswagen AG's (VOW.XE)
emissions scandal.
By accepting the fine Volkswagen said it is clearing another
hurdle in its path to drawing a line under the three-year-old
scandal that has cost it billions of dollars. The German car maker
admitted in 2015 to having rigged about 11 million of its diesel
vehicles worldwide--including models of its Audi brand--with
software to dodge emissions testing rules. German authorities fined
the group EUR1 billion earlier this year.
Volkswagen said the Audi fine won't alter the group's 2018
earnings guidance, despite hitting earnings.
Shares in both Volkswagen and Audi traded higher after the
announcement, with Philippe Houchois at Jefferies noting that
although the penalty is hefty, investors are relieved to finally
see a concrete figure after having anticipated a fine for some
time.
Arndt Ellinghorst at London-based brokerage Evercore ISI said
the fine is "manageable and incrementally positive as it removes
another leg of legacy uncertainty."
However, the news led Volkswagen's major shareholder Porsche
Automobil Holding SE (PAH3.XE) to issue a profit warning.
Audi has been inextricably involved to Volkswagen's emissions
scandal since it erupted. In June, former Audi CEO Rupert Stadler
was arrested in connection to the probe and has since remained in
pretrial detention. VW removed him from his post about two weeks
ago.
Volkswagen is still facing a lawsuit from German shareholders
who suffered losses when share prices dropped after the scandal
became public. The shareholders allege that the company didn't
notify them early enough, and launched a lawsuit against VW in
September. If a judge sides with investors, VW could face up to
EUR9.2 billion in damages.
The company is facing another class-action style lawsuit from a
German consumer group, which plans to go to court in November when
such proceedings become possible in Germany due to new
legislation.
Write to Max Bernhard at max.bernhard@dowjones.com;
@mxbernhard
-0-
(END) Dow Jones Newswires
October 16, 2018 06:54 ET (10:54 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.