15 II.6 Financing The focus in the first quarter of 2009 was on adjusting financing to the changed economic framework conditions. Against the background of heavy demand in Europe in the first half of 2008, in February 2008, we negotiated a new line of credit for EUR 325 million at favora- ble interest rates in return for agreeing to maintain certain key financial figures. In view of the sharp fall in demand in the fourth quarter of 2008 and the difficulty of forecasting further sales trends, the Group negotiated a standstill agreement with the bank consortium on February 27, 2009. The agreement includes the following elements: · Increase in the interest margin from 1.6% to 4.0%. · Suspension of the covenants (company key figures) as of December 31, 2008 and March 31, 2009. · The preparation and presentation of an expert restructuring opinion which describes the ability of the Company to restructure financially. The auditing firm KPMG was commissioned to prepare the study. · Development of a new financing concept by June 19, 2009, after submission of the expert restructuring opinion. · Extensive granting of guarantees in the form of commercial real estate mortgages, pledging of Group bank accounts, and the assignment of other assets as security. In addition, management made a EUR 1.3 million loan available during the reporting period. The loan is unsecured and has a term of 24 months. SAF-HOLLAND received an additional EUR 4.5 million in funding in the form of a loan provided by a longstanding customer. This loan agreement with a term of 18 months provides for interest to be paid at rates and on conditions that are customary in banking. Repayment is due in full on maturity, and the loan is secured by the use of non-core assets as collateral. II.7 Investments SAF-HOLLAND invested around EUR 2.0 million (previous year: EUR 4.7 million) in the first quarter of 2009. As last year's two acquisitions ­ the landing leg business of Austin-Westran and the former Georg Fischer Verkehrstechnik GmbH ­ have now completed the product portfolio, there were few investments in the reporting period. The addition of EUR 2.0 mil- lion in fixed assets was due mainly to delayed effects from investments in 2008. Investments in 2009 will amount to less than EUR 10 million. II.8 Liquidity As of the reporting date of March 31, 2009, SAF-HOLLAND held cash and cash equivalents totaling EUR 15.5 million (12/31/2008: EUR 8.6 million). The main reason was the fall in working capital requirement due mainly to the reduction of inventories to EUR 77.9 million (12/31/2008: EUR 85.8 million). As of September 30, 2009, inventories had amounted to EUR 111.9 million. The Company is reducing inventories continuously in order to adjust them to the decline in demand. The aim is to keep inventories down to the equivalent of one month's sales (30 days). Inventories had been built up in view of brisk demand in the first half of 2008, plant consolidations and closure in North America, and our own axle produc- tion commencing in North America. As of the reporting date, net working capital amounted to 12.2% of sales. The target is 9% of sales.