Thyssenkrupp AG is considering the sale of its steel and marine systems units as the conglomerate fights for survival in the aftermath of the coronavirus pandemic.
While the company will explore “consolidation options” for the businesses, the industrial group will look to develop its Materials Services and Industrial Components divisions, Thyssenkrupp said Monday in a statement.
The steel unit, the traditional heart of the company, burned through over 1 billion euros ($1.09 billion) in cash in the six months ending March 31.
Once a byword for German engineering prowess, Thyssenkrupp is being gradually split apart. Chief Executive Officer Martina Merz’s plan is aimed at downsizing the group for life after the $19 billion sale of its elevator unit closes later this year. The firm had hoped to use some of the proceeds from that deal to boost ailing units, although worsening finances are gnawing at the lifeline.
“We have taken some difficult decisions that were long overdue,” Merz said in the statement. “Thyssenkrupp will emerge smaller but stronger from the transformation.”
Thyssenkrupp’s net debt stands at 7.55 billion euros, according to earnings figures released last week, a figure likely to rise as the fallout from the pandemic cripples the global economy.
Thyssenkrupp already held exploratory steel talks with Salzgitter AG, people familiar with the matter said last year. Chinese and Indian peers had also expressed interest in Thyssenkrupp’s European steel operations, the people said. Sweden’s SSAB AB is also among the potential partners, one of the people said.
The firm’s steel division was already wrestling with a global glut and a sputtering German economy before demand took a further hit as the coronavirus outbreak spread in March, leading to automotive and other factory shutdowns.
