Thyssenkrupp AG warned staff that the pandemic is eating into funds the company aimed to use to shore up its businesses once a €17.2 billion ($18.8 billion) sale of its elevator unit completed, sending its shares down more than 10%. Thyssenkrupp—plagued for years by shrinking profits, surging debt and internal fights over strategy—agreed to sell its elevator business in February to a consortium led by global buyout firms Advent International and Cinven Ltd. and planned to use the money to deleverage and reinvest part in its remaining businesses. In an internal note to employees seen by The Wall Street Journal, management said the company now expected to have a lot less cash left over from the sale to reinject into operations than it had planned because the pandemic was hurting its steel, car parts and materials businesses. Production at nearly all business units has been scaled back, either because of government lockdowns or because of a drop in demand, prompting management to save costs as much as possible, top management wrote in the letter, which was first reported by German daily Handelsblatt. To help weather the coronavirus crisis, Thyssenkrupp also secured a loan of roughly €1 billion from German state development bank KfW, according to a person familiar with the matter.

Source: Wall Street Journal May 04, 2020 04:07 UTC