Schaeffler cuts IPO following VW scandal

Monday 12th October 2015 | 0 Comments

 

In what is being interpreted as fallout of the Volkswagen (VW) emissions scandal, Schaeffler significantly reduced its initial public offering (IPO) after delaying in light of the VW revelations. VW accounts for more than 10 per cent of sales at Schaeffler, which makes ball bearings for products ranging from tools to airplanes.

Schaeffler announced a price range for the offer of between 12 and 14 euros ($13.48-$15.72), to raise around 975 million euros. Reuters cited “sources familiar with the matter” as saying the company’s initial plan was to raise roughly 2.5 billion euros, indicating an IPO price of more than 15 euros a share. Schaeffler, which is saddled with 10 billion euros in debt, generates three quarters of its group revenue from the automotive business and is the major shareholder in Continental AG.

With Bosch and Continental suppliers of parts to the VW engines at the centre of the scandal, despite the fact that both companies agree that VW was responsible for the dodgy “defeat” software programmed into the systems, the latest news will be unwelcome to both German parts suppliers.

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Category: Company News, International News