Thyssen announces capital increase as U.S. deal sealed

Sat Nov 30, 2013 12:14pm EST
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By Maria Sheahan and Tom Käckenhoff

FRANKFURT (Reuters) - ThyssenKrupp (TKAG.DE: Quote) is selling its U.S. 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 1 billion euros ($1.36 billion) in a share sale.

Germany's largest steelmaker, whose empire stretches from shipyards to elevators, said late on Friday it would sell its U.S. steel finishing plant in Calvert, Alabama, to ArcelorMittal ISPA.AS and Nippon Steel & Sumitomo Metal Corp (5401.T: Quote) for $1.55 billion.

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 1 billion euros 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 U.S. 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 U.S. 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 13 billion euros 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 maneuvered 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 on Saturday.

Hiesinger has been trying to shed assets with 10 billion euros 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.   Continued...

A worker controls the temperature of a casting roller at ThyssenKrupp Steel Europe AG in Duisburg November 29, 2013. REUTERS/Ina Fassbender