"We have fulfilled another key requirement for a potential combination," finance director Klaus Rosenfeld said in a statement today, quoted by Autonews. Still, despite the apparent good news, sources close to the matter say the terms of the new loan agreement are more costly than the ones agreed prior to the crisis. The only way Schaeffler will be able to meet the terms, they say, is for the market to stop declining.
Problems for Schaeffler started in 2008, when it managed a hostile takeover of auto supplier Continental, following a $18 billion bid. The Germans finally ended up owning more shares that they could afford, slowly sinking into debt. This is basically what happened with other two German manufacturers, Porsche and Volkswagen, which went through a similar course of action.
Today, Schaeffler owns 49.9 percent of Continental directly and another 40 percent together with banks. The relationship between the two companies deteriorated even further this year and culminated this months with the replacement of Continental's CEO, Karl-Thomas Neumann, with one of Schaeffler's managers.
Neumann did not leave quietly however and managed a 1.5 billion euros capital increase prior to his departure. This action will dilute Schaeffler's stake, as it is now unable to buy more shares.
Back in June, Continental said it is considering a merger with Schaeffler, a move which would create a company with 33 billion euros in annual sales.
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