Germany-headquartered Thyssenkrupp issued warning to employees of its steel business unit to be prepared for additional changes.
The internal memo from Thyssenkrupp Chief Executive Martina Merz called for severe cost cuts by its steel business unit so that it does not take any financial support from the rest of the company’s operations.
The memo follows recent decision by the company to end negotiations with the GFG Alliance with regards to sale of its steelmaking assets. The company had been engaged in negotiations with the Liberty Steel subsidiary since October last year, until the latter found certain issues with one of its prime sources of finance. Furthermore, the two companies had failed to reach a consensus on several major issues including value and funding.
Following this, the talks between both the companies reached a deadlock. Also, Thyssenkrupp has cancelled the extraordinary supervisory board meet scheduled for 12th March on deciding upon the sale of its steel division to Liberty Steel.
Thyssenkrupp plans to develop its steel business on its own, which in turn could result in a listing or a partnership, the memo noted.
The steel division had swung to an adjusting operating profit of 20 million euros during the first quarter, upon comparison with a loss of 127 million euros in the corresponding quarter last year.
