Could Part Nationalisation Be an Option for Conti?

German media reports, supposedly quoting industry sources suggest Schaeffler Group is discussing the possibility of either the federal or state governments taking a direct stake in Continental AG. So far, the federal government has clearly rejected such an idea and has only indicated the possibility of potential loans or loan guarantees. Whichever way it goes, we are likely to see the outcome tomorrow 30 January as after the summit meeting between state prime ministers Christian Wulff (Lower Saxony) and Horst Seehofer (Bayern) and German Economics Minister Michael Glos in Berlin.

Meanwhile Reuters reported that Continental AG posted a full-year operating profit margin of 8 per cent in 2008, quoting “several people familiar with the matter.” The sources also said that Continental manager Gerard Cordonnier would be appointed as new Chief Financial Officer of the company.

On 27 January Reuters quoted a Bavarian state minister, reportedly from the government’s junior coalition partner, as saying that the state had “ruled out…directly injecting capital…into Schaeffler Group.” Free Democrats (FDP) Economics Minister Martin Zeil said: “It can only concern loan guarantees, and not taking a direct equity stake.”