Schaeffler Looks to Raise $1.5 Billion Amid Pandemic Fallout

(Bloomberg) -- Schaeffler AG is setting the stage to raise as much as 1.3 billion euros ($1.5 billion) as the automotive and industrial supplier looks to bolster its finances amid the fallout of the coronavirus pandemic.

The company will hold an extraordinary shareholders meeting on Sept. 15 to seek approval to issue as many as 200 million additional non-voting common shares, Schaeffler announced Thursday. The company’s stock fell as much as 6.1% to 6.06 euros.

Schaeffler said the money would strengthen its capital base and help it “take advantage of growth opportunities.” One of the goals of the authorization, which will have a term of five years, would be to increase its free float, the company said.

“This is about going on the offensive,” Chief Executive Officer Klaus Rosenfeld said in an interview. “We want to exit this crisis as a winner.”

The authorization gives Schaeffler the option to raise money if needed, he said, adding that he has no specific transaction in mind. The company is open to expanding its portfolio with potential acquisitions in the areas of e-mobility and sustainability as well as bolstering its industrial business, Rosenfeld said.

Like most companies in the automotive industry, Schaeffler has faced a historic slump in orders and revenue as lockdowns to contain the disease halted production lines and sapped demand. The company still managed to generate a first-half profit, despite revenue dropping by more than a fifth.

Schaeffler’s stock has tumbled by about a third this year, one of the reasons the company’s controlling owners have lost a large part of their once $35 billion fortune. Georg Schaeffler and his mother Maria-Elisabeth Schaeffler-Thumann also own a major stake in Continental AG, another automotive supplier.

It’s open at this point whether the family would participate in any future capital increase at Schaeffler, the CEO said.

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