Porsche SE plans to start an almost EUR5bn (US$7bn) share sale March 30 to reduce its debt as part of the plan to merge with Volkswagen.

The carmaker’s supervisory and executive boards have signed off on the plan to sell shares at EUR38 each to current owners, Porsche said in a statement.

One existing share carries the right to subscribe to 0.75 new shares. The price is a 32% discount to the preferred stock’s close on March 25 of EUR56.

Porsche plans to use the proceeds to cut debt to about EUR1.5bn.

The carmaker said that it expects the public offering to be approved by German financial watchdog BaFin on March 28. The subscription period for the new shares is then due to last from March 30 until April 12.

Assuming the shares are fully subscibed, Porsche will raise around EUR4.9bn - all the proceeds earmarked for debt reduction.