Thyssen’s US deal fails to fix wider losses, stock sinks

ThyssenKrupp shares collapsed yesterday after the steelmaker’s announcement of a buyer for only part of its loss-making Steel Americas unit left investors worried how much it still must do to extract itself from a business that is costing it billions.

ThyssenKrupp has been trying since May 2012 to find a buyer for its Steel Americas unit, comprised of a steel slab mill in Brazil and a US finishing plant.

Its plan to produce cheap slabs in the former and ship them to the latter for conversion into products for carmakers fell apart when Brazil’s currency appreciated, hiking labour and production costs, and demand for cars slowed with the global economy.

Steel Americas has cost Thyssen almost €13 billion ($17.7 billion) in investment and losses there over six years. – (Reuters)