Heisinger can't find any buyers, which he says highlights the biggest problem with the steel industry: It needs to consolidate, but there is little movement in that direction since "the pain is still not big enough."
Meanwhile, activist investment firm Cevian Capital increases its stake in the company to more than 15%, worth ~€1.6B ($2.2B), from 11% last year.
ThyssenKrupp (TYEKY, TYEKF) produces some evidence that its turnaround plan is working, as its FQ1 EBITDA more than doubled Y/Y to €247M (~$336M) and beat expectations of €209M, attributed to robust orders at the company’s capital goods businesses, including elevators and industrial plants.
ThyssenKrupp significantly reduced losses at its Steel Americas unit, which it decided to partially sell in December, while benefiting from a weaker Brazilian real and lower fuel rates.
Analysts remain cautious: "Despite an impressive first quarter the stock has run hard and the Steel Europe rump is now looking stretched,” Citigroup says, but at least the company's existence no longer looks threatened.
ThyssenKrupp (TYEKY, TYEKF) CEO Heinrich Hiesinger renews his pledge to transform the steel and engineering company into an industrial goods and services group but warns shareholders that the revamp will take time and bring more hardship.
Investors and analysts largely support Hiesinger's shift from steel but are critical of his execution; stumbles with the partial exit of the troubled Steel Americas unit and the sale of its stainless steel business to Outokumpu contributed to an accumulated net loss of €7.4B over the past three fiscal years.
The balance of power shifts at ThyssenKrupp (TYEKY, TYEKF), as the Krupp foundation, which has controlled the company since the 1960s, sat out a capital increase today due to a lack of cash, diluting its stake and losing its veto right.
Cevian Capital Partners, an activist shareholder already with a 6%-plus stake and which has invested in several other European companies, purchased a "significant" part of the shares on offer but less than half of the entire placement volume, WSJ reports.
Germany's largest steelmaker has been undergoing a deep restructuring as it grapples with weak demand and overcapacity in the European steel industry.
ThyssenKrupp (TYEKY, TYEKF) CEO Heinrich Hiesinger expects U.S. antitrust authorities to scrutinize his company's $1.55B sale of its troubled steel mill in Alabama to ArcelorMittal (MT) and Nippon Steel & Sumitomo Metal (NSSMY).
"Considering the already dominant market position of ArcelorMittal in the U.S. (auto steel) market, it is likely that authorities will take their time to look into this transaction," Hiesinger said.
ArcelorMittal doesn't expect to encounter problems getting the deal approved even though the company controls almost 40% of the market for North American auto steel.
ThyssenKrupp (TYEKY, TYEKF) confirms an agreement to sell its troubled Alabama steel plant to a joint venture formed by ArcelorMittal (MT) and Nippon Steel & Sumitomo Metal for $1.55B. (earlier)
The German steelmaker says it would increase its capital by as much as 10% in the deal, excluding subscription rights, which would raise close to €1B ($1.36B) at its current share price.
Thyssen still is stuck with its 73% stake in Brazil's CSA, which it also had wanted to sell, but the deal includes a six-year agreement for the U.S. plant to buy 2M tons/year of steel slab from CSA, or 40% of the Brazilian mill's capacity; the arrangement should mean a drop in raw steel imports into the U.S. and less downward pressure on prices.
"There'll be a psychological impact, and that will probably stop price erosion, and then you'll see a long-term impact six and nine months from now," the publisher of Steel Market Update tells WSJ.
ThyssenKrupp (TYEKY, TYEKF) agrees to compensate buyers of its Alabama steel plant for any underperformance in the next few years to seal a long-awaited deal to be outlined later today, Reuters reports.
The buyers, a consortium of ArcelorMittal (MT) and Nippon Steel, reportedly will pay ~$1.5B for the steel finishing plant.
Analysts say it isn't surprising that ThyssenKrupp offered concessions to clinch the sale but they would have to see the details to judge if it was a good deal; in any case, it paves the way for a much-needed capital increase at Thyssen, with several bankers saying they expected such a move as early as Monday evening.
While a spokesman says the company is still in advanced talks with one leading bidder involving its plants in Brazil and Alabama, sources say it more likely will sell only its Calvert, Ala., steel mill.
Months of negotiations with Brazil's SID have failed to reach a deal for the Alabama plant, but ArcelorMittal (MT) is believed to remain a serious bidder.
European activist investor Cevian Capital acquires a 5.2% stake in steelmaker ThyssenKrupp (TYEKY.OB, TYEKF.PK), saying its shares are undervalued but that it was encouraged so far by a recent strategic shift by management.
ThyssenKrupp has said it would restructure the company - cutting costs, shopping its loss-making Steel Americas operations and streamlining its European steel operations - so Cevian's next move is not clear.
Siderurgica Nacional (SID +5%) pops at the open after reports say talks concerning the purchase of two ThyssenKrupp steel plants broke down; the apparent sticking point is the price of the Alabama facility. An agreement in principle to buy a ~33% stake in ThyssenKrupp's plant in Brazil could be jeopardized; SID wants control of both plants, and sources say if it cant have both, it might walk away.
ThyssenKrupp (TYEKY.OB, TYEKF.PK) reportedly fails to reach a deal with Brazil's SID over the sale of two steel plants in the Americas, a serious blow to the steelmaker's efforts to unload unprofitable assets and shore up its balance sheet. The main sticking point appears to be the relatively new steel plant in Alabama that received a higher competing bid from ArcelorMittal (MT) and Sumitomo (NSSMY.PK).
ThyssenKrupp (TYEKY.OB) is fined €88M ($115.8M) by German competition authorities for its part in a price-fixing cartel, and warns it can't rule out further charges for alleged price manipulation. The fine and the prospect of more fines come at a delicate time for the steelmaker, which has struggled for at least a year to sell two loss-making steel mills to help cut a €5.3B debt.