- Thyssenkrupp steel division to sell stake in HKM
Thyssenkrupp Steel (TKSE), Germany's largest steelmaker, plans to divest its stake in Hüttenwerke Krupp Mannesmann (HKM) as part of a restructuring program. Sigmar Gabriel, chairman of TKSE's supervisory board, confirmed this on Friday evening, describing it as a key component of the planned, but yet-to-be-finalized, restructuring program by the management board.
TKSE holds a 50% stake in HKM, with Salzgitter holding 30% and French tube manufacturer Vallourec holding 20%. HKM employs around 3,000 people and produces approximately two million tons of steel for TKSE annually. TKSE aims to reduce its steel production capacity in Duisburg.
If a sale is not feasible, HKM will be closed. "The primary goal is to sell our stake in HKM and secure employment," Gabriel said after a meeting of the supervisory board. If a sale is not possible, TKSE is working on a consensual closure solution with the other owners, ensuring no redundancies. TKSE is already in talks with a participation company about a sale, with thoroughness taking precedence over speed.
The management board's restructuring program, which includes job cuts, was discussed but not yet approved. This is due to pending questions about the future financing of the steel company by its parent company, Thyssenkrupp, which is preparing its steel division for independence. The first step was the entry of Czech billionaire Daniel Kretinsky's energy company EP Corporate Group (EPCG) with a 20% stake last week, with talks ongoing for a further 30%. Kretinsky attended his first supervisory board meeting on Friday.
A neutral expert opinion on financing prospects for the next five years is to be prepared, with the restructuring program to be discussed based on this. It is expected to be presented this year.
TKSE CEO Miguel López cited low demand, high energy costs, overcapacity, and cheap Asian imports as reasons for the planned restructuring in May. The cyclical steel division has been a focus of the traditional conglomerate, which has its roots in the steel industry, for years. Around 27,000 people work in the steel division, including 13,000 in Duisburg. Thyssenkrupp employs around 100,000 people in total.
TKSE is exploring the possibility of selling its 50% stake in HKM, which is 'of a width of' approximately two million tons, to a participation company. If a sale isn't feasible, TKSE and the other owners are working on a consolidated closure plan to avoid redundancies.
