Continental AG, the German auto parts maker controlled by Schaeffler Group, is considering an initial public offering for its tire unit, Handelsblatt reported, citing unidentified people with knowledge of the plan.

A share sale would appease creditor banks, whose approval is needed for a planned merger of Continental and Schaeffler next year, according to the newspaper.

Schaeffler, which owns 75.1 percent of Continental, owes about 13 billion euros ($16.8 billion), the newspaper said. Continental would retain a majority stake in the tire unit under the plan, the newspaper said.

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