German bearings maker Schaeffler Group – heavily in debt after swallowing Continental just before the credit crunch began to bite – has broadly agreed interim financing worth EUR500m (US$661m) with its banks, a German newspaper said on Thursday, citing financial sources.
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Schaeffler would receive the loan, which runs over six months, in the next couple of days, Handelsblatt said, according to Reuters.
As a result, the family-owned company has won more time to come up with a restructuring plan it needs to present to the German government as a prerequisite for potential state aid.
Banks are expecting a solution from Schaeffler in the next three to five months, Handelsblatt said.
Schaeffler borrowed EUR16bn to finance last year’s takeover of Continental but the plan foundered on high debt service payments amid the auto industry crisis.
Co-owner Georg Schaeffler said last month his group needed up to EUR6bn in fresh financing and called for help from the German government, Reuters noted.
