Thyssenkrupp has secured approximately €1bn ($1.1bn) in state aid as a supportive measure until money from the sale of its elevator division is received, according to reports.
The steelmaker is the latest company to have received government funding packages in Germany due to slow demand, automotive companies’ shutdowns, and other COVID-19 impacts. Automotive companies and suppliers, especially, have made strong efforts to muster liquidity once auto sales in Europe dropped more than 50pc in March.
Europe, along with the global steel industry took a hard hit due to the pandemic, with many steelmakers, including thyssenkrupp, cutting production to match declining order books. The steelmaker is expected to cut production further in May and, according to media reports, will realize its full effects in a month or so.
The German steelmaker agreed in a Feb 2020 deal, to sell its elevator division to a group that includes Advent, Cinven and Germany’s RAG foundation for €17.2bn, with expectations to receive the money by June. However, it is unclear if the funds will improve the state of the steel company considering debt reduction and pension distributions that were made.
The new advance, coming from a state development bank will expire at the end of Sep 2020, however other terms and conditions remain confidential.
Thyssenkrupp produced just over 11mn mt of crude steel in the fiscal year ending Sep 30, 2019 with average crude steel output around 13mn mt per year.
($1 = €.91)