Reports: Continental Considers 1 billion euro Capital Increase

According to the newspaper recent plans for Continental to regain control of the merger through a reverse takeover of its 90 per cent shareholder have been “torpedoed” by Schaeffler Group. Schaeffler is reportedly negotiating with its backs to delay loan payments for two years. Under current terms it would have had begin repaying a first 500 million euro debt tranche in January 2010. Meanwhile, Continental is said to need a “quick merger or a capital increase” owing to the fact that it has 800 million euros in debt maturing in August and a further 3.5 billion euros maturing in 2010. Meanwhile, a Deutsche Bank investor’s note showed that analysts continue to support Continental’s progress in a complicated combination of circumstances: “Management did a good job in addressing their fixed cost base, since the negative operational gearing reached a low 17 per cent in second quarter All eyes are now on Continental’s official second quarter results release on Thursday 30 July.