Thyssenkrupp has announced that its steel division, Thyssenkrupp Steel Europe (TKSE), must rely on its own earnings to fund necessary investments, as the parent company aims to ensure the unit’s financial stability without additional support. However, Thyssenkrupp has provided financial backing for the steel division for the next two years.
This announcement from Thyssenkrupp CEO Miguel Lopez follows remarks from Sigmar Gabriel, Chairman of TKSE, who highlighted a €1.3 billion ($1.4 billion) funding gap within the steel division. Gabriel’s comments were made after a supervisory board meeting on Friday, reflecting the division’s ongoing financial challenges amid declining demand and falling steel prices.
Thyssenkrupp has been reducing its stake in TKSE as part of a broader restructuring effort. The goal, according to Lopez, is for TKSE to generate sufficient revenue independently, allowing it to finance its investment needs and withstand potential downturns in the steel market.
Lopez firmly dismissed any speculation regarding TKSE’s insolvency, stating, “The financial needs of Steel Europe for the next 24 months will be secured by Thyssenkrupp AG. There was never any danger of insolvency, and there won’t be now.”
The internal disagreement over funding comes shortly after Czech billionaire Daniel Kretinsky completed the purchase of a 20% stake in TKSE, with ongoing discussions to acquire an additional 30%. Kretinsky participated in the recent board meeting, where Gabriel also announced that an external audit would be conducted before the year’s end to assess the division’s restructuring and financial requirements.
Lopez supported the audit, stating it would provide a “sober and realistic” view of TKSE’s situation. The steel division, which has deep historical ties to Germany’s industrial sector, has faced significant challenges in recent years, needing billions of euros to remain competitive. The future of TKSE continues to be a critical issue for Thyssenkrupp as it navigates this period of transformation.
