Reports: Continental Considering Tyre Unit IPO
Continental AG is said to be considering an initial public offering for its tyre unit, according to German business publication Handelsblatt. Citing “unidentified people with knowledge of the plan”, the newspaper appeared to contradict earlier reports in a Business Week interview with the company’s chief financial officer Wolfgang Schaefer that said the company doesn’t need a stock sale until 2012. However, in that interview Schaefer reportedly said: the company’s last stock sale completed in January means it now has financing until 2012 covering its net debt of 8.2 billion euros, which wouldn’t rule out an IPO in time for then.
According to Handelsblatt, a share sale would “appease creditor banks, whose approval is needed for a planned merger of Continental and Schaeffler next year.” Schaeffler controls 75.1 per cent of Continental and owes about 13 billion euros ($16.8 billion), the newspaper said. Continental would reportedly retain a majority stake in the tyre unit under the plan.