Continental AG started talks with lenders to refinance $7.2 billion in loans

Article by Christian A., on February 1, 2011

Three sources said that Continental AG, a German automotive supplier, has started talks with lenders to refinance EUR5.3 billion ($7.2 billion) in loans that are due in 2012.

Two of the sources, who requested anonymity because the negotiations are confidential, said the talks are at an exploratory stage and the company hasn't decided on terms of the refinancing, which may lead to the extension of loan maturities or a reduction in borrowing costs.

One source said the Continental may obtain cheaper loan terms because of its improved operating business and a higher availability of credit in the market.

A credit analyst at UniCredit Spa in Munich, Sven Kreitmair, wrote to clients that a bank loan refinancing to extend Continental's debt maturity profile and lower interest expense is credit positive.

Continental said it is pursuing a merger with its dominant shareholder, Herzogenaurach, Germany-based Schaeffler Group, in the medium term.

As the world’s second-biggest manufacturer of roller bearings, Schaeffler is focusing on reducing more than EUR10 billion debts accumulated from acquiring shares in Continental in 2008. It owns 75.1 percent of the stock. Continental spokesman Antje Lewe declined to comment on the company's refinancing plans.

Continental, which trails only Robert Bosch GmbH by revenue, boosted 2010 sales by about 27 percent to more than EUR25.5 billion euros, powered by growth in emerging economies like Brazil, China and a rebounding U.S. market. [via autonews - sub. required]

Topics: continental

If you liked the article, share on:

Comments

Recommended

Hyundai is introducing a new 2018 Accent that is not only wider and longer, but is now also sporting a new look that is more serious than the previous model....
by - February 20, 2017
Fans and enthusiasts of the BMW M2 in the United States could now rejoice. This comes as their favorite BMW M2 is getting a limited edition version as prepped by...
by - February 20, 2017
Carmakers usually leave us thirsty for information on whether they would introduce a new, refreshed or face-lifted vehicle and on when they intend to launch it. There are reasons for...
by - February 20, 2017
Cadillac’s CT6 full-size prestige-luxury sedan is still somewhat new. It has been offered to the global auto market for two model years – 2016 and 2017. But for those who...
by - February 19, 2017
In many industries, it is the rivalries that make things exciting. In basketball for example, there is the well-known rivalry between the Los Angeles Lakers against the Boston Celtics. For...
by - February 19, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries