Thyssen announces capital raise as US deal sealed

FRANKFURT: ThyssenKrupp is selling its US plant to two rivals in a long-awaited deal to help extricate the German steelmaker from an ill-fated boom-year expansion plan, and said it plans to raise up to ¤1bn (£830.78m) in a share sale.
Germany’s largest steelmaker, whose empire stretches from shipyards to elevators, said late on Friday it would sell its US steel finishing plant in Calvert, Alabama, to ArcelorMittal and Nippon Steel & Sumitomo Metal Corp for $1.55bn.
It also said it would increase its capital by as much as 10 percent in a sale of new shares, which could raise close to ¤1bn at the current price, to bolster its balance sheet and help reduce a crippling debt burden.
ThyssenKrupp has been trying for more than a year and a half to find a buyer for its Steel Americas unit — comprised of the US steel finishing plant and steel slab mill CSA in Brazil — which has drained billions from the company for the past few years and been an obstacle to raising fresh funds.
But the sale of the US plant in Calvert is not the coup that ThyssenKrupp Chief Executive Heinrich Hiesinger had initially hoped for. It still leaves the group with its 73 percent stake in Brazil’s CSA, which accounted for the bulk of almost ¤13bn ThyssenKrupp has spent on Steel Americas. Hiesinger, who took the helm of the group in 2011, asked investors to be patient and give him more time to turn around Germany’s biggest steelmaker.
“When you restructure a company that has manoeuvred itself into a deep crisis over a period of many years, it’s also going to take years to put the company on a sound footing,” Hiesinger told journalists during a news conference yesterday.
Hiesinger has been trying to shed assets with ¤10bn of annual revenue to shift ThyssenKrupp away from the volatile steel business into higher-margin products and services such as elevators, submarines and factory components. But he has fought an uphill battle since he became CEO as the company was hit by scandals, while finances at the industrial conglomerate steadily deteriorated.
At the end of its financial year through September, ThyssenKrupp had to ask banks to waive loan covenants to avoid losing a major credit line.
And in another unexpected setback, ThyssenKrupp said on Friday it was forced to take back Italian steel plant Terni and high-performance alloy unit VDM, parts of the stainless steel business it sold to Finland’s Outokumpu last year.
Reuters