Hanover, Germany - In a sign of strain, Continental, the German supplier of tyres and electronic components to the car industry, is contemplating a 1-billion-euro
(1.3-billion-dollar) equity issue, a spokeswoman said Thursday in Hanover.

She was confirming remarks by chief financial officer Alan Hippe outside an investors conference in New York.

Hippe warned it was possible Continental might have to write down the value of companies it has acquired by up to 1 billion euros.

The spokeswoman said an issue of new shares on the same scale was being propounded as a solution.

Hartmut Meine, an official at Germany IG Metall industrial trade union who sits on the Continental board, said he would support the move as Continental urgently needed cash.

Continental, which has its head office in the northern city of Hanover, is effectively controlled by a smaller, family-owned, German ball-bearings manufacturer, Schaeffler, which bought in last year.

As Continental's stock price plunged amid recession-induced problems in the world car industry, Schaeffler found itself committed to paying a much higher price than the market price.

Continental's last major acquisition was the VDO car electronics unit of Siemens. (dpa)