Thyssenkrupp AG’s steel unit plans to sell a stake in an industrial site in Germany after a supervisory board meeting ended without agreement on a broader restructuring of the ailing division.
As part of a push to lower steelmaking capacity, Thyssenkrupp Steel Europe AG is seeking to offload its 50% stake in Hüttenwerke Krupp Mannesmann GmbH, according to a statement late Friday. The factory in Duisburg, which makes steel tubes among other products, employs roughly 3,000 people.
The decision marks another step in the former industrial stalwart’s years-long attempts to restructure the struggling business. On Friday, supervisory board members — with half of the positions made up of worker representatives — met to discuss future financing by the parent to ensure an independent future for the steel unit.
European steelmakers have for years suffered from weaker demand as well as pressure to lower emissions, and are reducing their workforces. Tata Steel Ltd. in June announced plans to cut 2,800 jobs and close furnaces at its UK operations. Germany’s Kloeckner & Co SE is proceeding with plans to cut 10% of its workforce in its European distribution.
No Decision
A final decision on a broader restructuring wasn’t reached Friday, after labor board members balked at proposals including more capacity reductions and significant jobs cuts. The board resolved to await the findings of an independent expert report that will detail future financing needs.
“After today’s meeting, we’re at half time in the debate about Thyssenkrupp Steel’s future,” according to a supervisory board statement. “Given the degree of the challenges, it’s probably not surprising this is turning into a two-step process.”
The steel unit’s board expects to finalize details of a financing deal for steel by Aug. 20 and discuss the plan at its next meeting on Aug. 29.
Thyssenkrupp in April announced plans to reduce steel-making capacity by about a fifth, alongside substantial job cuts among the division’s 26,000 workers, as it attempts to offload the unit. The decision, pushed through against opposition from labor representatives, formed part of a 20% stake sale in the steel unit to Czech billionaire Daniel Kretinsky’s EP Corporate Group. Kretinsky is in talks to buy a further 30% of the business.
Once a flagship of Germany’s industrial strength, Thyssenkrupp’s steel unit has dragged on the company’s overall earnings for years, with investors upping the pressure to restructure the unit that is also saddled with significant pension liabilities.
Source: Mint