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Thyssenkrupp stated on Saturday that its steel company, Thyssenkrupp Steel Europe, will undergo significant restructuring.
Thyssenkrupp announced on Saturday that its steel division, Thyssenkrupp Steel Europe (TKSE), must undergo significant restructuring to fund its investment needs through its earnings.
This statement came from Thyssenkrupp CEO Miguel Lopez following concerns raised by the chairman of the steel division about a €1.3 billion ($1.4 billion) funding gap that needs to be addressed.
The steel division is grappling with declining demand and falling steel product prices, leading to financial strain.
Despite these challenges, Lopez assured that Thyssenkrupp AG, the parent company, would secure the steel division’s financial needs for the next 24 months. He emphasized that there was no risk of insolvency, dismissing any speculation to the contrary.
The restructuring efforts follow Czech billionaire Daniel Kretinsky’s recent acquisition of a 20% stake in TKSE and ongoing talks to purchase an additional 30%.
Following a supervisory board meeting on Friday, where Kretinsky was present, it was announced that an external audit would be conducted before the end of the year. This audit aims to provide a clear and realistic assessment of the division’s restructuring and funding needs.
The sale and restructuring of TKSE, a business deeply connected to Germany’s industrial history, has been challenging. The division requires billions of euros in investment to remain competitive, a need that has complicated its sales and ongoing operations for years.
Lopez reiterated that the ongoing turnaround efforts aim to make TKSE financially self-sufficient, enabling it to weather future economic downturns without external support.
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