By Christoph Steitz and Tom Käckenhoff
FRANKFURT/DUESSELDORF, March 29 (Reuters) - Thyssenkrupp
has put the man behind the group's landmark elevator sale in
charge of divesting its steel division, in a bet he can speed up
and complete what has so far been a complex, drawn-out process,
two people familiar with the matter said.
Volkmar Dinstuhl, 50, is credited with the 17.2 billion euro
($18.6 billion) sale of Thyssenkrupp's elevator business to a
private equity-led consortium in 2020, a deal that was sealed
just before the COVID-19 crisis and saved the conglomerate from
the brink of collapse.
Following the transaction, Dinstuhl, who bears the title
International Master from the International Chess Federation
FIDE, was put in charge of Thyssenkrupp's Multi-Tracks
unit, which comprises smaller businesses the company may divest.
He will have his work cut out for him trying to sell
Thyssenkrupp Steel Europe, one of Europe's largest steelmakers.
Attempts to list, spin-off, sell or merge the cyclical steel
division with a peer have failed in the past, mainly because of
the billions of pension liabilities tied to the business that
goes back more than 200 years.
The engineering group, whose products range from car parts
to submarines, is now having another go, supported by external
advisor Goldman Sachs , sources told Reuters last week.
Thyssenkrupp declined to comment.
Pension liabilities have been an issue when Thyssenkrupp
sought to merge Steel Europe with the European division of
India's Tata Steel in 2019 and a year later when
Britain's Liberty Steel bid for the business.
Higher interest rates, however, have significantly reduced
those liabilities in recent months, potentially providing some
wiggle room in talks with CVC , a private equity firm
which is among parties that have taken an interest in the
business.
Analysts at Bank of America reckon that liabilities tied to
steel currently stand at 2.8 billion euros ($3 billion),
compared with 4 billion euros at the time of the planned
Thyssenkrupp-Tata tie-up, implying a sum-of-the-parts value of
3.4 billion euros.
That will not be enough as any buyer will need to spend
billions of euros on the division's transition towards
carbon-free steel production.
Renewed efforts by Thyssenkrupp to divest steel come after
the group put such a plan on hold, citing a lack of clarity over
how much of the cost of decarbonising steel production will be
subsidised.
On Friday, Thyssenkrupp's supervisory board is scheduled to
discuss the group's strategy, including scenarios for a
standalone solution for steel, which Chief Executive Martina
Merz says is necessary for the business to thrive.
"Merz must present a concept that offers good prospects for
both the steel division and the other businesses," said one of
Thyssenkrupp's powerful labour representatives, who hold half of
the seats on the company's supervisory board.
($1 = 0.9219 euros)
(Reporting by Christoph Steitz and Tom Kaeckenhoff
Editing by Miranda Murray and Tomasz Janowski)
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