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Thyssenkrupp said on Saturday that its steel business needs to be reorganized so that it can use its own earnings to pay for investments. However, it added that the parent company had guaranteed funding for the next two years.
The chairman of the steel group said that the company needs to find a way to pay its 1.3 billion euro ($1.4 billion) debt. This is what Thyssenkrupp CEO Miguel Lopez said in response.
Sigmar Gabriel of Thyssenkrupp Steel Europe (TKSE) said the thing about funding late Friday night, after a meeting of the executive board.
A drop in demand and the price of steel products are making the parent business sell its shares in the unit.
Lopez said that the goal of the current attempts to turn things around was to help TKSE make enough money on its own to pay for investments and get through any future short-term downturns.
He also said not to talk about bankruptcy or make assumptions about it.
“Thyssenkrupp AG will meet Steel Europe’s need for money over the next 24 months.” That should end all rumors for good. Lopez said in a statement, “There was never a risk of going bankrupt, and there won’t be now.”
The fight started after a new investor, the Czech billionaire Daniel Kretinsky, bought a 20% stake in TKSE last week. He is now in talks to buy another 30%. Kretinsky was at the board meeting on Friday.
Gabriel, a former federal minister, also said on Friday that the unit would be restructured and given more money after an external audit was done before the end of the year.
Lopez said on Saturday that this audit would help people see TKSE in a “sober and realistic” way.
TKSE has a lot to do with Germany’s past as an industrial powerhouse. It has been hard to sell for years, mostly because the company needs billions of euros to keep investing and become competitive again.
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