Workers seek thoroughness over speed in Tata Steel-Thyssenkrupp European JV

 

Thyssenkrupp workers on Thursday urged management to solve outstanding issues in talks with Tata Steel to create a European joint venture, signalling they would not be opposed to a further delay of the transaction if necessary.

The remarks come as Thyssenkrupp Chief Executive Heinrich Hiesinger finds himself under pressure from all sides to present a deal that will satisfy employees and investors, which have grown increasingly frustrated with the lengthy negotiations.

"There are still a number of unresolved issues until a possible signing," Tekin Nasikkol, chairman of Thyssenkrupp Steel Europe's works council and a member of Thyssenkrupp AG's supervisory board, said in a statement.

"We expect all parties to focus on diligence rather than speed in fixing the problems."

Talks to create a European steel joint venture have dragged on for more than two years and have hit a snag after the diverging performance of the two businesses prompted Thyssenkrupp's activist shareholders Elliott and Cevian to ask for better terms.

Hiesinger has several options to address the valuation gap and is seeking approval for the venture from Thyssenkrupp's 20-member supervisory board, where half of the seats are held by labour representatives, by the end of next week.

"If Mr Hiesinger needs more time he can have it as far as I'm concerned," Nasikkol said.

Hiesinger's options range from changing the 50-50 ownership structure, possibly to 55-45 or 60-40 in favour of Thyssenkrupp, transferring more Thyssenkrupp debt onto the venture, excluding Tata Steel from dividend payments or securing a cash payment from the Indian firm to settle the difference.

Nasikkol confirmed labour leaders would not support the venture taking on more debt. So far, Thyssenkrupp plans to transfer 4 billion euros ($4.6 billion) in liabilities, compared with Tata Steel's 2.5 billion.