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Manfred Wennemer Nominated to Bekaert Board

Following Julien De Wilde’s decision not to seek re-election to the board of Bekaert, the steel wire manufacturer has nominated ex-Continental AG CEO, Manfred Wennemer as director. The appointment is subject to approval by the general meeting of shareholders, which will take place on 13 May 2009.

Manfred Wennemer was chief executive officer of Continental AG from 2001 until August 2008, when he stepped down at the point that Schaeffler Group’s hostile takeover offer appeared to have reached the point of no return. Wennemer, had previously fought hard for Continental to retain its independence. He holds a Masters degree in Mathematics from the University of Münster, Germany and an MBA from INSEAD Fontainebleau, France.

18th March 2009/by Tyrepress Editors

Klaus Rosenfeld New Schaeffler CFO

The Schaeffler Group has appointed Klaus Rosenfeld (42) to the company’s executive management board (effective 18 March 2009) where he will assume the post of chief financial officer (CFO). Prior to joining Schaeffler, Klaus Rosenfeld was a member of the management board of Dresdner Bank AG from 2002 and was responsible for the areas Finance/Controlling, Compliance und Corporate Investments.

According to Reuters Rosenfeld is had been expected to step down from Dresdner Bank following its takeover by Commerzbank earlier this year. Rosenfeld replaces Thomas Hetmann (46) who the company announced was stepping down on 18 February. Schaeffler Group thanked Mr. Hetmann for his “hard work and dedication to the company.”

18th March 2009/by Tyrepress Editors

Schaeffler ‘Buys’ Time from Banks With ‘Bridging Loan’

Schaeffler Group has reportedly obtained a form of bridge financing that gives the automotive supplier more time to negotiate long-term funding, the German Die Welt newspaper has reported. Schaeffler owner, Maria-Elisabeth Schaeffler, apparently agreed to contribute part of her fortune in the deal with a group of lenders including Commerzbank AG and Royal Bank of Scotland Group Plc, according to the report, which added: “The arrangement means Schaeffler is no longer in danger of breaching covenants in the coming months.” However, Bloomberg reports suggest the financing was drawn from a revolving credit facility and that companies “don’t usually draw on the facilities.”

12th March 2009/by Tyrepress Editors

Has Schaeffler Puts the Brakes on Merger With Conti Automotive?

Schaeffler has reportedly brought its plans to merge with Continental’s automotive wing to halt, according to Germany’s Handelsblatt newspaper. “If synergies can be had without a major merger, then it would not put a strain on the organisation,” an unnamed source told the paper. However, the ball bearing maker’s spokesman confirmed, in an email to Bloomberg, that Schaeffler will: “Continue to work on the merger of both automotive operations…But it is certainly not a process that can be completed in the coming months.”

Earlier, Hubertus von Gruenberg, a former Continental AG chief executive, resigned following what the Financial Times (FT) called a “tumultuous meeting of the car-parts supplier’s board.”

10th March 2009/by Tyrepress Editors

Conti Supervisory Board Presents Board Nominees List

At its meeting on March 6, the Continental AG Supervisory Board adopted its proposals for shareholder representation to be submitted to a vote at the company’s Annual Shareholders’ Meeting on April 23, 2009. The nominees are:

Prof. Dr. Hans-Jörg Bullinger, President of the Fraunhofer-Gesellschaft

Mr. Gunter Dunkel, Chairman of the Executive Board of Nord/LB

9th March 2009/by Tyrepress Editors

Newspaper: Schaeffler May Retain Under 20%

Schaeffler Group’s owners will end up with a fifth or less of the company in the event that creditor banks take control of the automotive supplier, according to Sueddeutsche Zeitung. The German newspaper added that the government doesn’t plan to grant aid to the company, without citing a source. Meanwhile competitor Bosch denied reports that it had been in talks to buy Schaeffler Group.

6th March 2009/by Tyrepress Editors

Schaeffler Bullish Over Koerfer Ruling

Responding to yesterday’s ruling by the Hanover court that its chosen Continental chairman would be blocked from taking up the position, Schaeffler has issued a statement in support of Rolf Koerfer. The German courts believe there may be a conflict of interests in light of Koerfer’s position as a Schaeffler family adviser, while the ball bearing manufacturer believes that Koerfer has the right to take up the position in the manner of a “shareholder representative.”

4th March 2009/by Tyrepress Editors

Will Past Dealings Hinder Schaeffler’s Bailout Chances?

The German government is said to be in a difficult position….The Schaeffler Group, part-owner of Continental AG, has sought debt assistance, and the government seemed ready to help – until allegations of the company’s dealings in the Nazi era came to light.

At the end of February, the group issued the findings of independent research into its activities during the Third Reich, and this report shows Schaeffler to have widely used forced labourers in its Poland based armaments factories. The company released the findings in light of rumours circulating on the internet that its factories also utilised hair taken from inmates at Auschwitz, a charge Schaeffler vigorously denied.

3rd March 2009/by Tyrepress Editors

Hanover Court Blocks Schaeffler’s Koerfer Appointment

A ruling by the German courts in Hanover has prevented Schaeffler from appointing its chosen chairman for Continental. The manufacturer wanted to install attorney Rolf Koerfer, a Schaeffler family adviser, as the head of the German manufacturer, a court spokesman said on 3 March. The decision was made following a complaint from a member of Germany’s corporate governance commission that Koerfler may have a conflict of interest.

The ball bearing manufacturer, which holds a direct 49.9 per cent voting stake in Continental, put forward Koerfer for the position at an extraordinary supervisory board meeting in January. In addition to Schaeffler’s holding, the group has transferred another 40 per cent block of its stake in Conti to the banks in order to remain below 50 per cent, as agreed to end a takeover conflict.

The court has given board members until 10 March to comment on the case.

3rd March 2009/by Tyrepress Editors

Reports: Schaeffler Being Pushed Out of Conti

The German federal state of Lower Saxony wants Schaeffler Group to cut its stake in Continental AG to 10 per cent, according to Reuters. At the same time German daily Frankfurter Allgemeine Zeitung (FAZ) has reported that the banks that supported Schaeffler Group’s acquisition of Conti are discussing a possible unwinding of the transaction. According to the newspaper, the lenders are discussing a plan to absorb all the Conti stock Schaeffler currently holds. This scenario would reportedly also include diluting the stake held by the banks to less than 50 per cent by virtue of a capital increase. FAZ reports that Continental will discuss the plan at its supervisory board meeting on 6 March.

Meanwhile Christian Wulff, chief minister of Lower Saxony told the Handelsblatt newspaper: “The owner-family can still play a small role if need be, perhaps with a stake of around 10 per cent.” On the subject of state aid Wulff said: “[It] is possible at the earliest when the company has presented a concept on how synergies of its Continental acquisition could be achieved and how the overall company would look.”

2nd March 2009/by Tyrepress Editors

Schaeffler Pressurised to Reduce Conti Stake

The Reuters news agency has reported tha the German federal state of Lower Saxony wants Schaeffler Group to cut its stake in Continental AG to 10 per cent. At the same time, German daily Frankfurter Allgemeine Zeitung (FAZ) has reported that the banks that supported Schaeffler Group’s acquisition of Conti are discussing a possible unwinding of the transaction. According to the newspaper, the lenders are discussing a plan to absorb all the Conti stock Schaeffler currently holds. This scenario would reportedly also include diluting the stake held by the banks to less than 50 per cent by virtue of a capital increase. FAZ reported that Continental is to discuss the plan at its supervisory board meeting on 6 March.

Meanwhile Christian Wulff, chief minister of Lower Saxony told the Handelsblatt newspaper: “The owner-family can still play a small role if need be, perhaps with a stake of around 10 per cent.” On the subject of state aid Wulff said: “[It] is possible at the earliest when the company has presented a concept on how synergies of its Continental acquisition could be achieved and how the overall company would look.”

2nd March 2009/by Tyrepress Editors

Merkel: Loan Guarantees are ‘Right Tool’ for Schaeffler

Various online news sources are quoting German Chancellor Angela Merkel as saying that liquidity guarantees would be the right tool to help companies asking for public aid, such as Schaeffler Group. Chancellor Merkel said she has not seen a restructuring plan from either Schaeffler or car maker Opel, which is also requesting government support, yet. “I regard [liquidity] guarantees as the tool we are eyeing,” Merkel told journalists, according to Dow Jones. “Germany has an interest in strengthening companies which have a strong foundation,” Reuters quoted Merkel as saying.

Meanwhile, Schaeffler continues to investigate the possibility of debt-for-equity swaps as a means of paying off some of the multi-billion euro loan it borrowed to buy Continental AG. According to Bloomberg, financial institutions such as government-controlled Royal Bank of Scotland Group Plc – which backed Schaeffler’s takeover of Conti – may “saddle taxpayers with distressed assets as they negotiate debt-for-equity swaps with failing corporate borrowers.”

26th February 2009/by Tyrepress Editors

Schaeffler Willing to Sell Up to Save Company

Schaeffler Group’s billionaire owners (Maria-Elisabeth and son Georg Schaeffler) are reportedly willing to sell a significant amount of the family owned company in order to avoid a break-up of the automotive supplier. Initial reports in Thomson’s Merger News suggested Schaeffler’s owners were prepared to sell up to 75 per cent of the group in order to hold onto an anchor investment and prevent a break-up of the company. However, six hours later, Forbes quoted Detlef Sieverdingbeck, the firm’s spokesman, as saying that there is “no bottom or top limit.”

The latest developments are being seen as a further concession designed to convince the German government to give Schaeffler emergency support. 24 hours earlier Schaeffler’s owners signed a co-determination pact with the union that represents workers at both the Schaeffler Group and Continental AG businesses. Analysts observed that Schaeffler’s willingness to sell its stock and cosy up to the unions shows just how precarious the situation is for both the Schaeffler Group and Continental AG.

During the day’s trading Forbes reported that Continental had plummeted 21 per cent to 10.11 euros, the stock’s sharpest fall for 16 years.

24th February 2009/by Tyrepress Editors

Continental AG Reports 2008 Record Net Loss

Continental AG has reported a record group net loss for 2008, following what executive board chairman Dr Karl-Thomas Neumann called “an unusual year.” The net loss was the result of the company having to write down 1.23 billion euros of “goodwill impairment” due to poor performance in the automotive group’s powertrain division. This was compounded by the effects of high raw material costs and dramatic falls in OE demand during 2008. Consolidated sales came in at 24.239 billion euros, with a group margin of 7.6 per cent – a figure within the company’s “EBIT target corridor.” Nevertheless Continental was able to reduce net indebtedness by roughly 373 million euros, leaving 10.483 billion euros.

Rubber group figures for 2008 faired considerably better with sales of 9.35 billion euros and 10.5 per cent margin. Passenger and Light Truck Tire posted sales of 5.1 billion euros, adjusted pre-tax profits (EBIT) of 644.8 million euros equating to a margin of 13.1 per cent. ContiTech’s numbers totalled 3 billion euros, 327.8 million euros and 11 per cent for sales, adjusted EBIT and margin. Commercial Vehicle Tire (CVT), however, survived on a slim margin of 2.7 per cent (36.3 million euros) despite sales of over a billion. Dr Hans-Joachim Nikolin, executive board member responsible for commercial vehicle tyres, explained that the virtual collapse of OE demand and raw material prices were at the root of the division’s narrow margins. The 290 million euros of increased costs the group had to pay as a result of raw material price increases at the root of CVT’s woes as this division had to face 100 million euros of this figure alone. However, commercial vehicle tyre’s particularly dependence on OE sales is also exposed in the full-year 2008 results.

19th February 2009/by Tyrepress Editors

Schaeffler CFO Pushed Out By Banks

Schaeffler chief financial officer, Thomas Hetmann, will reportedly resign from the automotive supplier at the instigation of the group’s creditor banks. According to various news reports emanating from the Financial Times Deutschland, the 46-year-old is negotiating the contractual conditions of his departure. In addition, the creditors have reportedly formed a crisis task force and have requested that Deloitte produces an independent picture of the company’s financial situation. Financial Times Deutschland described the move as a “clear vote of no confidence in the leadership of Schaeffler CEO Juergen Geissinger.”

18th February 2009/by Tyrepress Editors