Continental has reported a EUR1bn (US$1.48bn) third-quarter net loss, due largely to a massive write-down, although the company forecast a significant year on year improvement for the final three months.
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Conti said it also plans to repair its balance sheet by no later than the end of March 2010 through a fresh injection of equity while it renegotiates a EUR3.5bn (US$5.2bn) loan payment. It also hopes to gain breathing space by persuading more than 50 creditors to delay the August 2010 tranche B payment of a syndicated loan.
Net debt dropped slightly to EUR9.46b (US$14.1bn), although this was still more than double its shareholder equity. The company said in a statement: “Owing to increasing capital expenditures in the fourth quarter and the seasonally atypical pattern in working capital requirements of late, one could see a renewed rise in net indebtedness at the year pulls to a close.”
Adjusted operating profit rose 30% to EUR413m (US$617m) but an unexpected “goodwill impairment” of EUR876m (US$1.3bn) dropped it into the red as Conti continued to feel the effects of its debilitating power struggle with largest shareholder Schaeffler Group.
Reuters noted that speculation continued on whether Schaeffler was trying to torpedo a much needed injection of fresh capital at Continental in order to prevent its 90% stake being diluted.
