German auto parts maker Continental AG plans to raise nearly euro1.1 billion ($1.6 billion) through a capital increase, money that will be used to tackle debt.
The company said late Wednesday that a syndicate led by Deutsche Bank AG, Goldman Sachs International and J.P. Morgan Securities Ltd. agreed to underwrite 31 million new shares at euro35 each. It said the increase will be carried out by way of a rights issue to existing Continental shareholders.
Continental will use the proceeds of euro1.1 billion to reduce debt incurred during the purchase of Siemens VDO, a company statement said.
Continental bought VDO, formerly Siemens' auto parts arm, in 2007 in a euro11.4 billion deal.
Continental shares were up nearly 5 percent at euro42.80 in Frankfurt trading.