S&P Downgrades Conti Following Neumann’s Departure
Dow Jones reports that Standard & Poor's has reduced Continental AG’s credit rating two notches in light of concerns it has over the influence major shareholder Schaeffler has on the company's strategy and credit quality. The downgrading occurred a day after Karl-Thomas Neumann stepped down from Conti’s Executive Board following a power struggle with the Schaeffler, and according to Standard & Poor’s, Neumann’s resignation "heightens our concerns of a negative influence of Schaeffler on Continental."
“In view of this change and the continuing absence of a CFO on Continental’s executive board, we believe that Continental will now find it even more difficult to address the refinancing of the 3.5 billion euro debt maturing in August 2010,” said Standard & Poor’s. The credit ratings agency downgraded Continental to B+, and the rating is still on watch for further downgrade.