They also received this advice: a “viable and forward-looking” plan, agreed on with creditors, is “a prerequisite for further negotiations.”
According to a Reuters report, Schaeffler Group had “sounded out” the German government about the possibility of 4 billion euros ($5.23 billion) in capital. The Federal talks came after talks with German states, including Bavaria, Lower Saxony and Baden-Wuerttemberg, were unsuccessful. For its part Bavaria’s government said only loan guarantees would be considered.
The delegation will have to rethink its approach after German Finance Minister Peer Steinbrueck said taxpayers wouldn’t be funding Schaeffler: “It’s not the job of the state to intervene in cases in which business decisions were possibly not thought through enough,” said a statement in Steinbrueck Berliner Zeitung.
Schaeffler defended the request for state aid on the basis that the market is facing a perfect storm of opposing forces: "We are experiencing the biggest financial crisis in decades, we have a global recession and a crisis in the automotive industry," Schaeffler explained.
Now, upon consultation with its banks, Schaeffler is reportedly planning to present to the government again in the coming weeks, Schaeffler spokesman Detlef Sieverdingbeck told Bloomberg. For his part, he characterised the talks as “constructive.”
Other market observers suggested Schaeffler will have a tough time without government aid. “Without state money, Schaeffler won’t make it…The government will eventually have to provide support, because there’s no investor in sight,” Bloomberg quoted Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen, as saying.
Why can’t Schaeffler bail herself out? Germany’s Bild newspaper asked the same question of the 67-year-old billionairess herself. The answer is simple. Personally Maria-Elisabeth Schaeffler is not in a position to bail out the business, despite being ranked by Forbes as the world’s 104th richest person, with a net worth of $8.5 billion. "Our wealth is bound up in the company. We have always invested the profits to grow and develop the company," she told the German tabloid, printed in an interview published on Jan. 28. (Tyres & Accessories/Staffordshire, U.K.)
