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Continental AG won't rule out capital increase, CFO says

From autonews| March 22,2007

German automomotive supplier and tire maker Continental AG has not ruled out a capital increase if shareholders authorize such a move but there is no concrete plan to do so soon, CFO Alan Hippe said today.

"There is no plan at this stage for a short-term capital increase," he said. "What matters to us is having flexibility."

Continental is keen to expand by acquisitions and has cast its eye on Siemens AG's VDO automotive unit, which is being prepared for an initial public offering.

It has also expressed interest in Goodyear Tire and Rubber Co.'s engineered products business.

Continental will ask shareholders at the April 24 annual meeting to authorize increasing its share capital by as much as half should it decide it needs more financial firepower.

"That is a normal and reasonable approach and is not directed at a specific situation," Hippe said.

Continental had planned to have shareholders authorize a possible capital increase at last year's annual general meeting as well, but the idea was rejected.

Hippe reiterated that the first quarter had gone well and said the company was considering raising passenger car tyre prices in Europe in the second half of the year to pass on higher commodity prices.

U.S. prices for car tires will go up 3 percent as of April 1, he said.

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