Thyssenkrupp considers carve-out of ailing steel unit: minister

Thyssenkrupp's logo is seen outside elevator test tower in Rottweil
FILE PHOTO: Thyssenkrupp's logo is seen outside the elevator test tower in Rottweil, Germany, January 21, 2020. REUTERS/Michaela Rehle

November 13, 2020

By Tom Käckenhoff and Christian Kraemer

DUESSELDORF/BERLIN (Reuters) – Thyssenkrupp <TKAG.DE> is considering carving out its steel division to seek state aid from Germany’s economic stabilisation fund in a bid to rescue the ailing business, a senior policymaker said on Friday.

Andreas Pinkwart, economy minister of North Rhine-Westphalia (NRW), Germany’s most populous state and where Thyssenkrupp is based, said talks with the conglomerate over state aid were ongoing and that various options were being discussed.

“At the moment we’re seeing that the company and also the labour representatives are leaning towards carving out steel and putting it under the WSF (economic stabilisation fund),” Pinkwart said in a state parliament session.

He said the scenario was being examined by Germany’s Finance Minister Olaf Scholz and Economy Minister Peter Altmaier.

A spokeswoman for the Economy Ministry confirmed talks with Thyssenkrupp and the state of NRW, saying Altmaier had made clear his willingness to provide funds to help the steel sector in its shift towards climate-neutral production.

Thyssenkrupp declined to comment.

The conglomerate is looking for ways to fix its loss-making steel unit and has not ruled out seeking state aid or selling a majority of the business to a rival. Britain’s Liberty Steel has made a non-binding offer for the business.

Labour union IG Metall is piling pressure on the government to bail out Germany’s largest steelmaker, whose operating loss likely stood at 1 billion euros ($1.2 billion) in 2019/20.

Juergen Kerner, chief treasurer of IG Metall and Thyssenkrupp’s deputy supervisory board chairman, said the government needed to take a stake of significantly more than 25% in the business.

A person familiar with the matter said that state aid talks with Thyssenkrupp were at an early stage. So far, five aid requests worth 6.58 billion euros have been granted by the WSF.

(Additional reporting by Christoph Steitz; Editing by Michelle Adair and Louise Heavens)