Continental Seeks The Way To Increase Their Share Capital
Posted on July 26, 2009
Filed Under Continental Tires, Interesting
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.
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