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VW rises on steps to recover from emissions scandal

Jun 20 2016 11:45
Alan Katz and Naomi Kresge

Berlin - Volkswagen rose the most in two months as the German carmaker showed signs of making progress in its efforts to emerge from the emissions-cheating scandal, with plans to submit a $10bn settlement in the US.

The US offer includes about $6.5bn for car owners and $3.5bn for the US government and California regulators, according to a person familiar with the plan, who asked not to be identified because the deal isn’t public yet.

Volkswagen is set to proceed even though it has yet to receive final approval on a retrofit for the vehicles from the Environmental Protection Agency and the California Air Resources Board, the person said.

The shares rose as much as 5.4%, the most since April 21, the day Volkswagen announced it had reached a preliminary agreement in the US The stock, which has rebounded more than 40% since hitting a crisis low in October, was up 5.1% to €124.85 at 11:37.

Volkswagen may have a “stellar” three-year comeback after defining fixes for cars in North America and Europe this year, London-based analysts with JPMorgan wrote in a note Monday, upgrading the shares to overweight from neutral.

The US settlement, due to be submitted to court by June 28, is a cornerstone of Volkswagen’s effort to recover from its admission last September to cheating on diesel emissions tests. The German carmaker has thus far set aside $18.4bn to cover the costs of the scandal, including repairs and lawsuits.

volkswagen  |  industrial  |  emissions scandal
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