HAMBURG -- The German state of Lower Saxony, top shareholder in Volkswagen, said on Friday it expected Europe's largest carmaker to cut its dividend to 1.00 euro from 1.30 euro per common share.
A German newspaper earlier reported that the budget plan of state-owned Hannoversche Beteiligungsgesellschaft (HanBG), which holds Lower Saxony's stake in VW, has penciled in a 2003 dividend payment of 57.9 million euros ($74.2 million), down from 75.3 million a year earlier.
A spokesman for the state's government confirmed on Friday that HanBG's budget plan was approved.
"That's how it's been approved," the spokesman said.
Lower Saxony owns 18.2 percent of Volkswagen's common shares. It does not own any preference shares, to which VW paid a dividend of 1.36 euros last year.
Three years ago, Lower Saxony used its weight in the carmaker's supervisory board to overrule management's dividend proposal, pushing through a 20 percent higher dividend.
VW is expected to publish preliminary 2003 results on Wednesday. It has already said its operating earnings would come in at less than half of the previous year as the strong euro, charges from its Brazilian business, costs for launching new models and charges for its luxury business weighed.