Steel Mills
Loan Test Waived for ThyssenKrupp AG
Written by Sandy Williams
September 26, 2013
ThyssenKrupp AG received permission from lenders to waive a test on its EUR 2.5 billion line of credit. The loan required ThyssenKrupp to limit its debt to equity ratio to 150 percent, a test that ThyssenKrupp would likely have failed, allowing lenders to cancel the loan. In June of 2013, the company’s debt ratio was 186 percent. The line of credit was provided by 37 banks in 2007 and matures in July.
On Wednesday, European investor Cevian Capital announced acquisition of a 5.2 percent stake in ThyssenKrupp AG and expressed confidence in the future potential of the company. ThyssenKrupp stocks rallied 3.6 percent following news of the acquisition.
The sale of the ThyssenKrupp Americas holdings would help reduce the company’s debt ratio. In the meantime, Heinrich Hiesinger, CEO of ThyssenKrupp, has been searching for ways to raise cash for the troubled company. On Sept. 19 the company announced the workweek for Steel Europe will temporarily be reduced from 34 hours per week to 31 hours and non-pay-scale employees will lose six days of leave or take a 2.44 percent reduction in monthly salary. The temporary measures will run from October 1, 2014 to October 1, 2018.
ThyssenKrupp has been negotiating to sell their troubled Steel Americas mills for over a year. SMU sources believe CSN is still the company TK AG has been spending the most time with. We are hearing that the deal is for the Calvert, Alabama operations with some form of slab supply agreement out of the CSA mill in Brazil. Our sources are telling us that the “papers are ready to sign” but CSN continues to negotiate. The difficulty is reported to us to be the CSA slab agreement and all of the nuances to that agreement including a clause which gives TK AG the right to suspend the slab supply after one year.
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Mills
White House may delay decision on USS-Nippon deal until after election: report
The White House decision on blocking Nippon Steel’s play for Pittsburgh-based U.S. Steel might be pushed back until after the upcoming presidential election, according to a report in the Washington Post.
Hybar lands ‘strategic’ investment from Quanta Services
Hybar said that contracting services firm Quanta Services has made a “strategic” investment in the company as it build its sustainable rebar mill in northeast Arkansas.
Cliffs to place C-6 furnace at Cleveland Works on hot idle: sources
Cleveland-Cliffs plans to place the C-6 blast furnace at its Cleveland Works in Ohio on hot idle in October, according to sources familiar with the matter.
Domestic steelmakers push back on Ternium’s 232 exclusion requests
Ternium USA Inc. has requested a host of Section 232 tariff exclusions since the US reimposed the duties on Mexican steel earlier this summer. Domestic steelmakers, however, are pushing back.
USS introduces ‘ZMAG’ coated steel to withstand tough weather
U.S. Steel has rolled out “ZMAG,” a flat-rolled coated steel product intended to endure harsh weather conditions.