The German family-owned industrial company is focused on producing ball bearings and other automotive parts and it’s now focusing on a planned initial public offering to relieve its indebted accounts.
The IPO is believed to be one of the biggest in the country this year, with Schaeffler AG aiming to tap around 3 billion euros ($3.4 billion) in the process, according to sources that have knowledge of the matter but refrained from being named because all the details are not of public knowledge yet. According to a statement on Monday the company would divest around 25 percent of its shares in the planned IPO in Frankfurt by letting investors purchase up to 166 million new and existing shares. The balance sheet will use the proceeds and the group also wants to shed an additional 1 billion euros of debt from its cash flow by 2018.
The prospect of a successful IPO would help the company turn its fortunes after going through a credit crisis that took atoll as the company tried to engulf German auto parts competitor Continental AG just as the latest global crunch was at its peak. The company is today the largest shareholder in Hanover, Germany-based Continental, owning around 46 percent, according to data from Bloomberg, but Schaeffler’s net debt was of 6.24 billion euros after the first six months of the year. The company announced around 66 million shares would come from a capital surge while another approximately 100 million shares would be divested by holding company ruled by the Schaeffler family.