VW ready to divest brands, assets to cover dieselgate costs

Volkswagen has reportedly told the banks supplying a 20 billion Euro loan that it would sell its assets if it finds no other way of repaying the one-year loan it has taken. VW secured a 20 billion euro bridging loan from 13 banks and is planning to refinance it by issuing bonds over the next couple of months. Under the terms, VW is said to have assured the lenders that it would sell or list assets worth up to significantly more than 20 billion euros if it fails to find other sources of money.

According to the report by Reuters, a source stated that brands like Ducati, Lamborghini and Bentley may be divested to cover the costs of the scandal, if VW cannot repay its debt. However, VW's premium brands are a secondary consideration as their niche placement and relatively low production numbers make them less valuable. MAN's power engineering operations, whose products include ship engines, mini power plants and propulsion systems among others on the other hand, is expected to top the list of potential divestments with the division valued at 4-5 billion Euros.

The German auto conglomerate is facing a massive financial burden of government penalties and individual lawsuits worldwide, not to mention the logistical costs of recalling and fixing millions of cars globally.