ThyssenKrupp AG (TKA), the German steelmaker struggling to rebuild after a failed expansion in the Americas, slumped the most in more than a year in Frankfurt trading on speculation it’s planning a capital increase.
ThyssenKrupp slid as much as 6.9 percent, the steepest intraday drop since December 2011, and traded 6.5 percent lower at 17.185 euros as of 10:15 a.m. local time. The shares lost 43 percent of their value last year after the company wrote down 3.6 billion euros ($4.7 billion) and canceled its dividend for the first time.
The steelmaker is considering a capital increase of more than one billion euros, Handelsblatt reported earlier today. Kilian Roetzer, a spokesman for ThyssenKrupp, declined to comment on the report.
“ThyssenKrupp needs a capital increase, it cannot survive without it,” Hans-Peter Wodniok, an analyst at Fairesearch GmbH & Co KG, said by phone from Kronberg near Frankfurt.
A possible obstacle to an increase is the Alfried Krupp von Bohlen und Halbach Foundation, the company’s largest shareholder, whose 25.33 percent stake gives it a blocking minority in ThyssenKrupp. The foundation is headed by Berthold Beitz, a 99 year-old veteran German industrialist.
“The question is what the foundation will do,” said Wodniok. “It probably couldn’t participate in a capital increase,” he said.
Handelsblatt said Beitz may have been convinced of the necessity of the increase given the company’s finances. The foundation didn’t immediately return a call from Bloomberg News seeking comment.
Chief Executive Officer Heinrich Hiesinger is expanding the company’s non-steel business and cutting its business divisions to five from eight. ThyssenKrupp posted a net loss of 4.7 billion euros in the fiscal year ended Sept. 30.
Hiesinger, 52, is seeking to repair the damage from price- fixing and bribery scandals as well as the botched expansion in the Americas.
ThyssenKrupp unexpectedly announced on March 8 that Gerhard Cromme is stepping down on March 31 as chairman of the supervisory board. The Board approvedDeutsche Telekom AG Chairman Ulrich Lehner as his successor today.
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