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Schaeffler AG and its holding company Schaeffler Verwaltungs GmbH about 950 million high euros1 3 billion to pay off debt by selling a combined interest of 4 percent in Continental AG.
The largest shareholder of the second largest car-parts manufacturer Europe placed 7 Continental 8,000,000 shares at a price of 50 122 euros each, the company based in Herzogenaurach Germany, said today in a statement the stock has been sold a March 5 percent discount at yesterday's closing.
This takes the pressure off Schaeffler, who still has enough votes to control the meetings of shareholders of Continental, said Frank Schwope, NordLB analyst in Hanover, Germany.
Before the sale, the Schaeffler Group has loans totaling $ 10 3 billion euros from its takeover of a majority of Continental in early 2009. Since then, Schaeffler has reduced its participation in the Hanover, Germany-based manufacturer and debt refinancing to reduce costs.
Schaeffler owns nearly 46 percent still held by Continental and doesn t plan to reduce the participation of more to maintain a safe majority at the annual meeting, CFO Klaus Rosenfeld, said today.
Continental shares fell 3 percent up to 4 121 euros and 50 down 3 percent 6 to 12 26 pm in Frankfurt trading The stock has climbed 40 percent this year, valuing the German supplier to May 24 Billions of Euro's.
The new debt reduction is an important step for the successful ongoing development of our company, Maria-Elisabeth Schaeffler and her son Georg, maker of the owners, said in the statement that we will maintain our investment in Continental as it is long-term and strategic importance to us.
Schaeffler AG, which made bearings for automotive and industrial equipment, will use an additional 325 million euros in more cash flow to repay a total of 1 € 28 billion of the group's debt, the company said .
The product helps to reduce net debt to 5 billion euros to 5 Schaeffler AG and 3 € 2 billion to the holding company owned by Maria-Elisabeth and Georg, who is the parent company of Schaeffler AG, Rosenfeld said during a conference call.
We're lowering the debt to about 9 billion euros, which will hopefully be recognized by rating agencies, he said during a conference call The share sale is another important step towards deleveraging the business.
The company has agreed not to sell additional Continental shares for at least 180 days in the offering, which was managed by Goldman Sachs Group.
Schaeffler raises $ 1, Schaeffler raises.