HANOVER, Germany (April 24, 2009)—Continental A.G. board Chairman Karl-Thomas Neumann, under pressure from Conti's largest shareholder, Schaeffler Group, will present a “sustainable concept” in the next 100 days for the integration of the two German automotive suppliers.
The plan will address the future of Conti's rubber activities, Neumann said at the firm's annual shareholders meeting this week in Hanover.
Delaying this process longer would put the firms at risk of an “uncontrolled development,” Neumann said in remarks with the press after the meeting.
Before any plan can be formulated, however, the company needs answers to certain questions from outside agencies.
Neumann said the company has committed to paying large sums as part of its agreement with the banks over the acquisition of Siemens VDO. The next tranch of 3500 million (euro) is due next summer. The company has three options for doing this, he said: paying off the existing credit lines by borrowing from other sources; increasing capital; or divesting corporate entities.
Neumann said the financial markets make the first two options very challenging. In any case, before making a decision on which option to select, the company needs to review its own internal strategic direction. “As long as this basic course has not been charted,” he said, “Continental's room for maneuver is very limited.”