Dec. 21 (Bloomberg) -- Continental AG, Europe’s second largest auto-parts supplier, said it’s working to refinance a syndicated loan maturing in April 2014 to cut debt.
The company is in talks with banks on reducing the loan volume “slightly” to a total of 4.5 billion euros ($5.9 billion) and splitting it into two portions, the Hanover, Germany-based company said in a statement today.
“We are confident that we shall be able to conclude the negotiations and sign the credit agreement in January 2013,” Chief Financial Officer Wolfgang Schaefer said in the statement.
Continental affirmed its 2012 earnings target on Oct. 31, as car-market growth in North America and Asia offset a decline in its home region, and said it plans to increase sales next year. A focus on high-value parts such as emergency-braking systems and fuel-injection technology has helped the manufacturer withstand shrinking automotive demand in Europe.
One tranche of the loan will amount to 1.5 billion euros and a three-year term and the remaining 3 billion euros will be a five-year revolving credit facility, the company said.
The parts maker’s initial loan for acquiring the VDO car-electronics unit from Siemens AG in 2007 stood at 13.5 billion euros. The company had net debt of 6.8 billion euros at the end of the third quarter.
Continental fell as much as 0.7 percent to 85.15 euros and was trading down 0.3 percent at 11:44 a.m. in Frankfurt. That pared the stock’s gain this year to 78 percent, valuing the company at 17.1 billion euros.
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