Volkswagen moves closer to possible listing of Porsche subsidiary

In the search for more cash to pursue its switch to electric cars, the Volkswagen Group is apparently moving forward on plans to list its sports car subsidiary Porsche on the stock exchange.

There has been speculation for some time about an initial public offering (IPO) of Porsche.

The cash-cow has for years punched above its weight when it comes to contributing to the VW Group's profits.

VW announced on Tuesday that it was in "advanced talks" about the move with holding company Porsche Automobil Holding, which is also VW's major shareholder.

Volkswagen and Porsche Holding had negotiated a agreement on key points which should form the basis for further steps in preparation of a possible IPO for Porsche. A final decision has not yet been taken, however.

It was not year clear whether shares would be open to the general public for purchasing on the markets.

Volkswagen chief executive Herbert Diess has long been seen to be exploring options to raise extra capital for future investments.

The firm has already earmarked a sum of over 10 billion euros for the next five years for e-cars, software and digital platforms.

Preferred shares in Volkswagen jumped 8.5% after the announcement. Shares in the Porsche holding company also rose by over 10% during Tuesday trading.

The holding company is seen as the institutional centre of power in the Volkswagen network. It is directly controlled by the powerful Porsche and Piëch families - and the current generational change could still bring a lot of movement.

Currently, the holding company owns some 53% of the voting rights in the VW Group.