Continental Seeks The Way To Increase Their Share Capital
Financial Times reports that the General Director of the Continental Dr. Karl-Thomas Neumann is going to discuss with the Supervisory Board a proposal to raise the share capital.
Board meeting scheduled for next week, after its end in the end of the July the decision on the integration of Continental and Schaeffler companies is to be presented.
The proposal to raise the capital may be seen as «an alternative to a junction with the Schaeffler”, notes the FT.
The publication also says that the recent plans for Continental to get control over a combination of the two companies through a junction with the Schaeffler, which has now 90% of the shares of Continental, were not highly acclaimed by the Schaeffler.
Schaeffler now will negotiate with its partners to postpone the payments on loans for two years. In the current conditions, the company must begin paying the first tranche of 500 million euros in January 2010. At the same time, Continental should be «in a hurry with the junction, or to increase the share capital», because the tire company should also pay 800 million dollars in August this year, and another 3.5 billion in 2010.
In doing so, Deutsche Bank analysts continue to express their support for Continental, noting that the company is growing despite the combination of adverse circumstances: «The heads of company have done a great job to fix the structure of company expenditures».
As reported by German business publication WirtschaftsWoche, Kuwait Investment Authorities (KIA) are considering investing in a Continental company.
The article, entitled «Continental: Automotive supplier is negotiating with Royal Investment Fund, the Emirate of Kuwait on possible investments» states that «Kuwaiti investors contacted Dr. Karl-Thomas Neumann in the last few days».
Investors also had a meeting in Hanover with the Prime Minister of Lower Saxony, Christian Wulff, to discuss the political prospects for potential investments.
The Fastest Tires In The World
On the July 17, a unique two-engined Audi TT, which has passed through the hands of MTM tuning studio professionals, set a new speed record of 393 km / h on high-speed track in Papenburg. The car, which has its own name - Bimoto was equipped with two 1.8-liter turboengines from Volkswagen, which boosted to 370 hp each, dressed in the Continental ContiSportContact Vmax tires. After successful tests MTM Continental specialists are sure that sports car with a combustion engine can speed up to 400 km / h.
The main purpose of MTM in Papenburg was to prepare to a speed record races in Nardo (Italy) in October this year. Record at 393 km / h was recorded in the first day of testing at 07:25. This is the highest speed ever reached with the ContiSportContact Vmax under test conditions.
Choosing a suitable tire, MTM holder Roland Meyer conducted the test with the tires and other brands. Summing up, he said: «At high speeds that Bimoto reached, ContiSportContact Vmax Tires showed excellent stability».
ContiSportContact Vmax is the fastest tire in the world, suitable for speeds up to 360 km / h. Moreover, in testing conditions, this point can be increased. That is why the tests in Papenburg were attended with delight by technical staff of Continental. Initially, the ContiSportContact Vmax tire has been developed for ultraspeed fine-tuned and sports cars. Continental spent several years developing ideal sports tires and Continental specialists were imperially impressed in Papenburg with their own achievements. Now it has is entered the Guinness Book of Records as the fastest tire in the world.
Continental Seeks New Markets
«Continental AG» Concern (Germany, Hannover) has acquired new facilities in order to make winter tires and strengthen its position in Russia and the Scandinavian countries.
Lothar Salokat, the representative of the board of directors of the group at the press conference on conclusion of a large-scale transactions between Continental AG and the largest Finnish manufacturer TIKKA Spikes Oy said: «The agreement, which was concluded with the TIKKA company, will allow us to continue to cooperate with other manufacturers of tires and reach, thanks to established opportunities, the new levels and increase sales of tires, including Russia».
The agreement with the TIKKA Group Oy company, which manufacturing facilities are located in Finland in Tikkakoski, Jyväskylä and Espoo, has been signed yet on the June 18, 2008. According to the contract, Continental AG company will also receive a complete package of shares in subsidiary TIKKA Group OOO «TIKKA», based in St. Petersburg. But declaring the transaction, which was already signed has become possible only in September 2008, after receiving permission from the Antimonopoly Committee.
According to experts, estimate sales of TIKKA Spikes OY (Finland) and OOO «Tikka» (Russia), numbering 120 employees, amounted to more than 15 million euros. Continental AG concern, a leading global manufacturer of tires and automotive components, with annual sales of around 30 billion euros after the purchase of the Finnish manufacturer will be able to expand its production capacity and increase the proportion of Continental tire brand in the Russian market.
Signing this agreement was quite essential for Continental company, as in the current circumstances while closing factories in Germany and France as the result of the global economy crisis, tire manufacturers seek to remedy their losses by all means. And as for Continental, the most preferable option is to enlarge their existing markets in the developing countries.
An Agreement On Continental Tires In Shteken
The heads of Continental, IG BCE trade union and the representatives of workers came to an agreement on the production of commercial tires in Shteken (Hannover, Germany). To reach a compromise every opportunity in the labor market have been used. The package of agreements define the prospects for 2010. «The package of compromise agreements resulted from several rounds of talks, which are often were threatened with falling. Be that as it may in the end, both sides moved towards each other and realized all the responsibility in the face of complex and difficult economic situation », - said Werner Bischoff , the representative of the Executive Committee of IG BCE.
«We have proved that we are always ready to discuss reasonable solutions. The government of Lower Saxony has played an important role in putting forward an initiative for the talks and strongly contributing to its success. During the decision-making, we take into account the continuing recession in the market, because of which it has become necessary to control the volume of production in Europe. The package of agreements gives us enough freedom to optimize the list of products already in 2010. At the same time, we began a process of negotiations intended to lead to a common denominator demands of different parties and to establish a schedule of resignations and stop wasting time on the establishment of clarity regarding the future for 780 workers », - said Dr. Hans-Joachim Nikolin, a member of the executive board of Continental Commercial tires.
Compromise package includes the following main points:
Due to the significant drop in demand in Europe, the production of commercial tires in Shteken will be suspended at the end of 2009. The remaining workers will be working on a short schedule for a maximum period set by law.
Automatic production module capable of producing 500,000 will be operating until the end of 2010. For its work 300 men are required.
At the end of June 2010 it will be decided on the basis of forecasts on the market, whether the module will continue to work in 2011.
It takes 50 people to carry out the production concept.
Leadership Council of the plant and workers will come to an agreement on the socially acceptable schedule of layoffs, according to which in 2009 the staff will be reduced by 200 workers.
Another 255 workers will be reduced during the first 3 quarters of 2010 after the settlement of differences.
If market conditions do not permit to continue operation of the automated module 300 workers will be dismissed at the end of 2010.
