HANOVER, Germany (Aug. 3, 2009)—Continental A.G.'s supervisory board has approved an increase in the firm's capital by more than $2 billion.
It also disclosed that the firm wants to discuss with its creditor banks ways to handle credit instruments worth $5 billion that will come due in August 2010.
The capital increase will provide Conti with a sound financial structure for the medium and long term, the firm said. It will raise the capital by issuing new shares, according to Executive Board Chairman Karl-Thomas Neumann.
“This capital increase provides us not only with greater entrepreneurial flexibility,” Neumann said, “it also gives all of us a bit more security.”
Neumann also pointed out the decision will benefit Conti's largest shareholder, Schaeffler Group, as well.
The company did not elaborate on its plans regarding repayment or restructuring of the 2010 debt obligations.