Schaeffler's family sold assets and refinanced to survive its Continental debt

Schaeffler, the German ball-bearing and auto-parts family group, borrowed roughly €16 billion in 2008 to take control of Continental. Weeks later the credit crunch froze the markets, the world economy slid, and the debt became unserviceable.

In February 2009 owners Maria-Elisabeth Schaeffler and her son Georg publicly asked for limited state support, offering to sell part of the family fortune to repay debt — the first such request from the family. By August 2009 the banks agreed a €12 billion refinancing plan that relieved the pressure.

The operating business had never stopped working. 2010 set records: sales rose 29% to €9.5 billion, automotive revenue grew 34%, and net income returned to €63 million against a €1.2 billion loss in 2009 — €459 million excluding a one-off €396 million dilution loss from Continental's rights issue. Debt was cut about 6% to €5.7 billion, and 2011 was guided past €10 billion of sales for the first time.

Sales rebounded 29% to €9.5B in 2010, net income returned to €63M after a €1.2B 2009 loss, and debt fell to €5.7B.

The family's willingness to sell assets convinced lenders and the state they would not walk away.

The €12B refinancing matched debt maturities to the recovery.

Automotive demand rebounded faster than feared in 2010.

Dilution losses were one-off accounting items, not operating damage.

When a leveraged family deal meets a crash, act like an owner: offer part of the family fortune, renegotiate with banks, and keep the operating company intact so the up-cycle can repay the debt.

Schaeffler exceeded €10 billion of sales in 2011 with record results, keeping its Continental stake through the recovery. The episode became the reference point for how a family-controlled industrial group can survive a leveraged takeover that meets a crash.