Banks who have lent money to Continental and Schaeffler Group are to meet on Friday to negotiate the future of the two companies, Financial Times Deutschland reported, without citing sources.
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The newspaper noted that agreement by the banks would remove the last obstacle before the merger of the two partsmakers.
Following a year of boardroom struggles, during which time Schaeffler has attempted to take over the much larger Conti, the companies struck a deal earlier this month. Continental’s CEO Karl-Thomas Neumann stepped down under pressure from Schaeffler, while the investor agreed to remove its chief consultant Rolf Koerfer from the head of Continental’s supervisory board.
FTD said Schaeffler’s lenders were looking for a capital hike at Continental, which has debts for EUR10bn (US$14.3). Some EUR3.6bn ($US9bn) of the loans mature next August. In the worst case, the company would have to declare insolvency, which would be a disaster for major shareholder Schaeffler.
The newspaper added that, with about 60 banks, Continental’s consortium is extremely large, so at first only representatives of four banks would take part in the talks – ING, BNP Paribas, Barclays and Calyon. Schaeffler’s lenders include Commerzbank, HVB, the Royal Bank of Scotland and LBBW.
Before the meeting, the Schaeffler banks would discuss the so-called “project fairplay” concept, developed by consultancy agency Roland Berger on request of Commerzbank. FTD said that this compared the data of the two companies and discussed the possible combination of the operating units.
