SWISS STEEL HOLDING AG 
By 
LONDON (Reuters) - Indebted Swiss-listed steelmaker Schmolz + Bickenbach (>> Schmolz&Bickenbach AG) is seeking to raise more capital through a rights issue than previously planned, Chief Executive Johannes Nonn said.
He said he hoped the capital increase would be completed by mid-October, and that the company could then carry out restructuring, which could include selling assets in its German and European distribution division and job cuts.
Austerity measures to reduce debt in Europe has crimped construction and manufacturing in the region, battering steel demand.
Banks have been withdrawing from Europe's steel sector, putting the survival of even some of the most established industry players at risk and forcing companies to seek alternative funding sources.
Schmolz + Bickenbach shareholders backed a rights issue to raise 330 million Swiss francs (223.2 million pounds) in June, but last week the board of directors asked for the capital increase to be raised to at least 430.5 million Swiss francs.
It has also asked for a complete replacement of the board of directors and both requests will be discussed at an extraordinary meeting on Sept 26.
"The capital increase is a big step we will be taking this year and I think within two years we will be in a financially very healthy situation," said Nonn, who took the role of chief executive in February.
"Of course if you see our financial figures they could be better but there are also some steel companies that are in a much worse state than we are."
Underlining the malaise affecting the sector, German steelmaker ThyssenKrupp AG (>> ThyssenKrupp AG) is making final preparations for a capital-raising, banking sources said on Thursday.
Schmolz + Bickenbach, which since June has had Russian tycoon Viktor Vekselberg as its biggest shareholder with a 25.3 percent stake, is planning the rights issue to cut its debt and raise working capital.
The steelmaker's net debt has been fairly steady in recent years - it stood at 902.8 million euros at the end of 2012, 5 percent lower than in 2007.
It declined to say how much of the money raised in the rights issue would be used to repay debt and how much the company, which has about 10,000 employees, would use to invest.
Nonn, previously a board member of German steelmaker Salzgitter (>> Salzgitter AG), said he hoped Vekselberg, who has interests in metals and the oil industry in Russia, could help increase sales to Russia, where special steel consumption is expected to increase as the country prepares to begin fracking.
(Editing by Pravin Char)
By Silvia Antonioli
