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| ThyssenKrupp said to scrap sale of unit | |
| Bloomberg / Frankfurt July 6, 2009, 0:54 IST | |
ThyssenKrupp AG, Germany’s largest steelmaker, scrapped the sale of an industrial services unit as part of a ¤1 billion ($1.4 billion) disposal of assets after buyers pulled out, people familiar with the situation said.
The Dusseldorf-based producer abandoned the offering of ThyssenKrupp Industrieservice after potential buyers, including Hochtief AG and Bilfinger Berger AG, Germany’s biggest builders, and private-equity firms decided against bidding, three people said, declining to be identified because the talks were private.
The sale of two other units, the Xervon chemical and power plant operator and scaffolding company Safway, may also fail as Royal Bank of Scotland Group Plc and JPMorgan Chase & Co, who were managing the disposals, are no longer offering financing for potential buyers, the people said.
Three companies including private-equity firms Triton Beteiligungsberatung GmbH in Frankfurt and Bridgepoint Capital Ltd, the owner of German eyeglass company Rodenstock AG, submitted bids for Xervon, two people said. Safway received interested from US bidders, another said.
ThyssenKrupp Chief Financial Officer Alan Hippe is seeking to cut costs after the company’s debt surged and shares slumped. Net debt at the company, which unveiled the planned sale in 2008 to fund growth, more than doubled to ¤3.7 billion in the six months ended March on steel-mill investments in Brazil and Alabama. The shares have fallen 10 per cent this year, the worst performance on the nine-member Bloomberg Europe Steel Index.
The company “announced the sale a year ago and they haven’t completed the deal yet,” said Peter Metzger, an analyst at Sal Oppenheim in Frankfurt who has a “reduce” recommendation on the steelmaker. “One bottleneck is the lack of credit availability for acquisitions.”
The units had sales of about ¤1.7 billion in the year ended September, Chief Executive Officer Ekkehard Schulz said in August, and had about 23,000 workers. ThyssenKrupp spokesman Klaus Pepperhoff wouldn’t comment on the sales on Saturday.
Hochtief, Bilfinger, Bridgepoint, JPMorgan and RBS officials also declined to comment. Triton officials didn’t immediately return calls.
ThyssenKrupp on Saturday fell 31 cents, or 1.8 per cent, to ¤16.99 in Frankfurt trading, giving the company a market value of ¤8.7 billion.
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