By Christoph Steitz and Tom Käckenhoff

The crown jewel in a company whose operations run the gamut from building submarines to fertilizers, the elevator division has received interest from bidders since the company in May disclosed plans to list it in a public offering.

To win back investor confidence, Kerkhoff is also putting three struggling business units under review and pledged to fix a sprawling corporate structure.

The company's shares, which are trading around 16-year lows, rose as much as 5.1% on news of the restructuring.

"One thing will stop, which is that businesses without a clear perspective are burning cash on a permanent basis, destroying value that other business areas have generated," Kerkhoff said.

"We need to stop the bleeding."

He also said the group had held "early discussions" with strategic players on other business divisions - which include plant engineering and industrial components - in which it has said it could sell majority stakes.

Hit by weakness at two of its core markets, automotive and steel, Thyssenkrupp said adjusted earnings before interest and tax (EBIT) are now expected to decline to about 800 million euros ($897 million) this year. That is down from a previous forecast for 1.1-1.2 billion euros.

UNDER PRESSURE

The warning is another blow to confidence in Kerkhoff, whose credibility has been hurt by a botched attempt to merge the company's steel business with Tata Steel European unit and a failed plan to spin off its capital goods unit.

Still, Kerkhoff said he continued to have the backing of the group's supervisory board, which includes top shareholders Cevian and the Alfried Krupp von Bohlen und Halbach foundation.

Kerkhoff became CEO last year to fill a leadership vacuum triggered by the resignation of both the group's chairman and CEO, both defenders of Thyssenkrupp's sprawling conglomerate structure that has long been criticised by investors.

Cevian, the group's No.2 shareholder, has long demanded a less complex set-up and alternative ownership structures for the company's assets, arguing they could thrive more successfully outside the boundaries of a conglomerate.

BIDS FOR ELEVATORS

Thyssenkrupp's Elevator Technology unit is by far its most profitable operation and valued at up to 14 billion euros - more than twice Thyssenkrupp's current market valuation.

Kerkhoff - who has so far only disclosed plans for an IPO of the unit - acknowledged the company had received expressions of interest that would be assessed. He declined to say whether Thyssenkrupp would sell a majority stake in the division.

Sources have told Reuters that private equity firms KKR, Advent, and CVC [CVC.UL] as well as Finnish elevator group Kone have contacted Thyssenkrupp to discuss interest in its elevator unit.

"The obviously great interest of competitors and financial investors shows us how attractive the elevator business is," Kerkhoff said.

Thyssenkrupp is also putting three other units - its springs and stabilisers, system engineering and heavy plate divisions - under review. They accounted for 4% of group sales but a quarter of negative cash flow in the current business year.

Analysts applauded the latest plans.

"Thyssenkrupp's new strategy is the first that could tackle its structural deficits," Rochus Brauneiser, head of steel at Kepler Cheuvreux Equity Research, said.

"The best move would be to sell a large chunk of the elevator business to pay down debt and fully externalise pensions."

(Editing by Deepa Babington)

By Christoph Steitz and Tom Käckenhoff