FRANKFURT (Reuters) – Thyssenkrupp mentioned on Saturday its metal division have to be restructured to fund funding wants with its personal earnings, however that the mum or dad firm had supplied monetary safety for the subsequent two years.
The feedback from Thyssenkrupp CEO, Miguel Lopez, got here after the chairman of the metal division mentioned the enterprise must bridge a 1.3 billion euro ($1.4 billion) funding hole.
Sigmar Gabriel of Thyssenkrupp Metal Europe (TKSE) made the funding remark late on Friday after a supervisory board assembly.
The mum or dad firm is reducing is its stake within the unit, which is affected by a drop in demand and metal product costs.
Lopez mentioned that the aim of the continued turnaround efforts was to allow TKSE to earn sufficient cash by itself to fund its funding wants and to deal with any short-term down cycle sooner or later.
He additionally warned towards any hypothesis about an insolvency.
“The financial needs of Steel Europe for the next 24 months will be secured by Thyssenkrupp AG (ETR:). That should put an end once and for all to any speculation. There was never the danger of insolvency and there won’t be now,” Lopez mentioned in a press release.
The dispute comes after new investor Czech billionaire Daniel Kretinsky final week closed the acquisition of a 20% stake in TKSE and is in talks to purchase an extra 30%. Kretinsky was at Friday’s board assembly.
Gabriel, a former federal minister, additionally mentioned on Friday an exterior audit would now be carried out earlier than the tip of the yr to find out the unit’s restructuring and funding wants.
Lopez added on Saturday that this audit would serve to see TKSE in a “sober and realistic” mild.
The sale of TKSE, which is carefully tied to Germany’s historical past as an industrial heavyweight, has been fraught with difficulties for years, principally as a result of the enterprise wants billions of euros to maintain investing and regain competitiveness.
