Schaeffler sells down Continental stake
FAMILY-OWNED German ball-bearings maker Schaeffler is working on a major refinancing plan through which it will sell some of its indirectly held shares in German automotive supplier Continental AG, it emerged yesterday.
The proceeds from the sale of the Continental shares will be used to partly repay some of its debt.
Interest rates and maturities of the remaining loans are expected to be improved through the deal, the people familiar with the negotiations said.
Up until now, Schaeffler has controlled 75 per cent of Continental’s shares with some shares held by banks on its behalf. After the deal, Schaeffler will control around two thirds of the shares.
Schaeffler took control of the much larger German auto supplier Continental about two years ago after launching a hostile $18bn (£11.2bn) bid in which it ended up collecting more shares than it could afford, lumbering itself with billions of euros of debt. Schaeffler and Continental had originally planned to merge their businesses but Schaeffler boss Juergen Geissinger last September backed away from the deal.