Continental’s banks want to stop it from acquiring rival Schaeffler and running up further debt, Financial Times Deutschland reported on Thursday.
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The newspaper, quoting company sources, said Continental was already EUR11bn (US$15.2bn) in debt. So far 14 major creditors, most of them European banks, have united to halt Conti’s bid and more creditors were expected to join them. The creditors worry that a reverse takeover would be “too big, too complex and too difficult”.
Schaeffler ran up EUR12bn of debt as it acquired 90% of Continental in a bitter tussle last year. FT Deutschland said that its creditors were happy to give new credit to Continental to allow it to buy the whole of Schaeffler and apply for state loan guarantees.
