Continental Refinances Credit Lines Maturing in 2012

Automotive supplier secures financing of €6 billion. Terms and financial debt maturity profile substantially improved.

Frankfurt/Main, Hanover, March 29, 2011. The Continental Corporation has successfully completed the final stage of its comprehensive refinancing program. On Tuesday, the international automotive supplier agreed new terms and conditions for the VDO loan for an original financing volume of €6.5 billion maturing next year. The new package features a credit volume totaling €6 billion: One loan tranche of €625 million will mature in August 2012, a further tranche of €2.875 billion as well as a revolving credit facility amounting to €2.5 billion have a term of three years. The financing will be provided by more than 35 banks and was significantly oversubscribed.

“On the basis of our good results for 2010 and our positive outlook, we were able to achieve the better conditions we intended. This reflects the confidence in the economic strength of Continental and our reliability. Our improved debt maturity profile had a particularly positive influence on our creditworthiness and should help to further enhance our rating. Moreover, we decided to reduce the credit volume by €500 million to €6 billion in view of our convenient liquidity cushion of €4.2 billion at the end of 2010”, said Continental CFO Wolfgang Schäfer in Hanover. “Following this, the last major phase in our overall refinancing project over the last two years, we would expressly like to thank our partners at the banks involved. We were very pleased that they supported us and trusted in us in the middle of a deep economic and financial crisis, even during the very difficult period around the end of 2009 and the start of 2010.”

The Continental Corporation had originally received a €13.5 billion credit line from banks in the form of a syndicated loan to finance its acquisition of Siemens VDO in the summer of 2007, which has meanwhile been reduced to €6.5 billion. This was done via the capital increases implemented in 2007 and 2010 amounting to a total of €2.5 billion. In addition, proceeds amounting to €3 billion from the 2010 bond issues as well as funds from the cash flow provided by operations were also used to repay the loan.

Within two years, the Continental Corporation had reduced its financial liabilities by more than €3 billion, bringing the remaining total to €7.3 billion by the end of 2010. The ratio of net indebtedness to equity at the end of 2010 was 118% after 219% at the end of 2009, and could fall below the key 100% mark before the end of this year. Continental had cash and unutilized, committed lines of credit of €4.2 billion as of the end of 2010.

Hannes Boekhoff
Vice President
Media Relations
Continental AG
Vahrenwalder Strasse 9
30165 Hanover, Germany
Phone: +49 511 938-1278
Fax: +49 511 938-1055
E-mail: prkonzern@conti.de
                 
Antje Lewe
Spokeswoman
Media Relations
Continental AG
Vahrenwalder Strasse 9
30165 Hanover, Germany
Phone: +49 511 938-1364
Fax: +49 511 938-1055
E-mail: prkonzern@conti.de