Continental and its lending banks have amended the Facility Agreement on the syndicated loans Continental took up for financing the acquisition of Siemens VDO. With regard to the financial covenants agreed therein, the amendment provides for a ratio of financial indebtedness and EBITDA on the one hand and EBITDA to net interest on the other hand which is, in each case, more favourable to Continental than in the existing Facility Agreement. In turn, Continental has committed to pay, in particular, a higher margin as well as to provide certain security. In addition, the parties have agreed on amendments of the Facility Agreement which are market standard in order to reflect the recent changes in the rating of Continental.
At the same time a majority of the banking syndicate has committed, via a so-called Forwart Start Facility, to provide Continental with funds of up to Euro 2.5 bn for settlement of the Euro 3.5 bn tranch maturing in August 2010 under the terms of the Facility Agreement. The amount actually drawn by Continental under the Forward Start Facility will mature, simultaneously with the remaining tranches of the Facility Agreement, in August 2012. The Forward Start Facility will only come into effect if Continental has raised gross proceeds of at least Euro 1 bn by a share capital increase. Other terms and conditions of the Forward Start Facility correspond to the terms and conditions of the Facility Agreement as now amended.