ThyssenKrupp rakes in €882m from new issue
by Arno Schuetze and Maria Sheahan,
2013-12-04 05:56:37.0
FRANKFURT — Germany’s ThyssenKrupp raised €882.3m in the sale of new shares, as it seeks to bolster a balance sheet weakened by a downturn in the global steel market and years of losses at its Americas business.
ThyssenKrupp, Germany’s biggest steel maker and a symbol of the country’s industrial prowess, said on Tuesday it had placed 51.5-million new shares with institutional investors for €17.15 apiece.
That was at the lower end of the €17.05 to €17.63 range that the shares were offered at and represents a discount of 2.8% to Monday’s closing price.
The group’s finances have deteriorated as CE Heinrich Hiesinger struggled to extricate the industrial conglomerate from its loss-making Steel Americas venture, comprised of a steel slab mill in Brazil and a US finishing plant.
On Friday, ThyssenKrupp announced it had agreed to sell only the US plant in Calvert, Alabama — to ArcelorMittal and Nippon Steel & Sumitomo Metal — for $1.55bn, the low end of expectations, leaving its Brazilian problem unresolved.
And in another unexpected setback, ThyssenKrupp was forced to take back Italian steel plant Terni and high-performance alloy unit VDM, parts of the stainless-steel business it had sold to Finland’s Outokumpu last year.
Exane BNP Paribas has estimated that proceeds from the capital increase of €730 would be enough to lower ThyssenKrupp’s gearing — the ratio of its net debt to equity — to less than 100% from the 200.6% level at the end of September. Others said the share sale was more of a band-aid than a permanent fix.
"We think that the size of the capital increase is too small," Metzler analyst Lars Hettche said, adding any new problems relating to the troubled steel mill in Brazil and the assets taken back from Outokumpu could trigger the need for another capital hike.
Shares in ThyssenKrupp were down 1% at €17.455, extending their decline after dropping by more than 8% on Monday.
Reuters
Picture: REUTERS
FRANKFURT — Germany’s ThyssenKrupp raised €882.3m in the sale of new shares, as it seeks to bolster a balance sheet weakened by a downturn in the global steel market and years of losses at its Americas business.
ThyssenKrupp, Germany’s biggest steel maker and a symbol of the country’s industrial prowess, said on Tuesday it had placed 51.5-million new shares with institutional investors for €17.15 apiece.
That was at the lower end of the €17.05 to €17.63 range that the shares were offered at and represents a discount of 2.8% to Monday’s closing price.
The group’s finances have deteriorated as CE Heinrich Hiesinger struggled to extricate the industrial conglomerate from its loss-making Steel Americas venture, comprised of a steel slab mill in Brazil and a US finishing plant.
On Friday, ThyssenKrupp announced it had agreed to sell only the US plant in Calvert, Alabama — to ArcelorMittal and Nippon Steel & Sumitomo Metal — for $1.55bn, the low end of expectations, leaving its Brazilian problem unresolved.
And in another unexpected setback, ThyssenKrupp was forced to take back Italian steel plant Terni and high-performance alloy unit VDM, parts of the stainless-steel business it had sold to Finland’s Outokumpu last year.
Exane BNP Paribas has estimated that proceeds from the capital increase of €730 would be enough to lower ThyssenKrupp’s gearing — the ratio of its net debt to equity — to less than 100% from the 200.6% level at the end of September. Others said the share sale was more of a band-aid than a permanent fix.
"We think that the size of the capital increase is too small," Metzler analyst Lars Hettche said, adding any new problems relating to the troubled steel mill in Brazil and the assets taken back from Outokumpu could trigger the need for another capital hike.
Shares in ThyssenKrupp were down 1% at €17.455, extending their decline after dropping by more than 8% on Monday.
Reuters
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