Schaeffler seeks to raise $1.5B amid pandemic fallout

BERLIN/MUNICH -- Schaeffler hopes to raise as much as 1.3 billion euros ($1.5 billion) as the 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 said Thursday.

The company 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 supplier said.

"This is about going on the offensive," CEO Klaus Rosenfeld said in an interview. "We want to exit this crisis as a winner."

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.

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

Schaeffler, of Herzogenaurach, Germany, ranks No. 28 on the Automotive News list of top 100 global suppliers with an estimated $10.1 billion in 2019 sales to automakers.