The German state of Lower Saxony denied on Monday a media report that it was considering relinquishing its blocking minority by selling some of its illiquid voting stock in Volkswagen.


Signs for a VW-Porsche 914 car are pictured at a car dealer in Bochum May 7, 2009. The car was a joint production of Volkswagen and Porsche between circa 1969 and 1976. Ina Fassbender/Reuters

The state will not lower its stake (in ordinary shares) below the current 20.01 percent. Lower Saxony remains committed to its responsibility for Volkswagen, a spokesman for the state government said.

According to VW's bylaws, all major corporate decisions must be passed by a super-majority of at least 80 percent of the votes cast at a shareholder meeting.

German news agency dpa had reported Christian Democrat sources as saying a sale of no more than 2 percent would likely be part of Lower Saxony's budget plans.

Any sale of that size would mean it would not lose its status as second largest shareholder to Qatar, the Gulf state that controls the third largest block of votes in VW at 17 percent.

A spokesman for Volkswagen declined to comment.

Lower Saxony is home to five of the six western German VW plants and has maintained a voting stake of at least 20 percent in the carmaker ever since the company was privatized in 1960.

Roughly eight out of every ten jobs at VW's brand's total German workforce are located in the state, which has traditionally had a strategic interest in maximum employment.

Were Lower Saxony to sell ordinary shares, it would have been better served financially to have done so when they were each trading around 200 euros ($261.4) or more during the period that Porsche SE was looking to acquire control.

The state however had opposed Porsche dominating the company and refused to sell despite the sky high price. Eventually Porsche SE's attempt failed and the company agreed last July to be subsumed into Volkswagen next year.

As part of the life-saving deal, Porsche granted its support in December's shareholder meeting to Lower Saxony that allowed the state to enshrine a right in the corporate bylaws to appoint two representatives to Volkswagen's 20-person supervisory board as long as it owns 15 percent of the votes or more.

(Reporting by Arno Schuetze and Christiaan Hetzner)