DUISBURG/FRANKFURT (Reuters) - Ailing conglomerate Thyssenkrupp will review the business plan for its steel division in the coming weeks, it said on Tuesday, adding there was limited scope for additional funds in light of its stretched balance sheet.
The remarks came as steel workers staged protests at the unit’s headquarters in Duisburg in the heart of the Ruhr area, Germany’s industrial heartland, asking for job security and future investments.
The unit’s future hangs in the balance after a deal to combine it with the European division of Tata Steel collapsed earlier this year. Thyssenkrupp Steel Europe saw its adjusted operating profit plunge 95% in the last fiscal year.
“We have to invest. And that’s what we do. This means that the financial funds available to us must be proportionate to the expected profit,” the group said in a statement. “In light of the group’s economic situation the leeway is limited.”
Thyssenkrupp said its current plans include 570 million euros ($628 million) of investments for steel, adding it would have to first review a new strategy for the unit before it would decide whether to top that up - and by how much.
Steel workers have demanded 1.5 billion euros of investments over several years. Thyssenkrupp’s balance sheet is aching under 12.7 billion euros of debt and pension liabilities, against a market valuation of less than 7 billion euros.
The elevators-to-submarines group said the new steel plan would have to be a part of the group’s broader strategy, which includes selling units or finding partners for businesses that are not competitive with rivals.
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Reporting by Tom Kaeckenhoff and Christoph Steitz; Editing by Riham Alkousaa and Jan Harvey