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MarketScreener Homepage  >  Equities  >  MUMBAI STOCK EXCHANGE  >  Tata Steel Ltd    500470   INE081A01012


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Tata Steel : Thyssenkrupp presents 'complex' turnaround plan for steel - workers

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12/03/2019 | 04:51pm EST
Thyssenkrupp's logo is seen close to the elevator test tower in Rottweil

Ailing conglomerate Thyssenkrupp has worked out a new strategy for the group's steel business, a leading labor representative said on Tuesday, adding the roadmap included significant investments but also restructuring steps.

By Tom Käckenhoff and Christoph Steitz

The strategy paper was presented to the supervisory board of Thyssenkrupp Steel Europe on Tuesday, following labor protests at the division's headquarters in Duisburg, in the heart of the Ruhr area, Germany's industrial heartland.

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, forcing management to announce the reduction of 2,000 out of the unit's total 27,000 jobs.

Knut Giesler, who leads the powerful IG Metall union in North Rhine-Westphalia, where Thyssenkrupp is based, said the new plans, which were kept under wraps, would be assessed by workers and be discussed with management.

"We are paying close attention to the impact of the production network's restructuring on sites and employees," Giesler said, adding avoiding forced layoffs was paramount.

Giesler said workers had won time, as a far-reaching employment protection scheme, which was due to run out at the end of the year, would be extended by at least three months.

Thyssenkrupp declined to comment on details of the proposals.

The group had earlier said there was limited scope for additional funds for Steel Europe in light of Thyssenkrupp's stretched balance sheet, which is aching under 12.7 billion euros ($14 billion) of debt and pension liabilities.

"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," Thyssenkrupp said in a statement. "In light of the group's economic situation the leeway is limited."

Thyssenkrupp Steel Europe's adjusted operating profit plunged 95% in the last fiscal year, hit by high raw material costs and falling demand in Europe.

Thyssenkrupp said its current plans include 570 million euros of investments for steel per year, adding it would have to first review the unit's new strategy 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.

The elevators-to-submarines group said the new steel plan will 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.

(Editing by Riham Alkousaa and Jan Harvey; Editing by Richard Chang)

By Tom Käckenhoff and Christoph Steitz

Stocks mentioned in the article
ChangeLast1st jan.
TATA STEEL LTD -3.01% 475.9 End-of-day quote.0.67%
THYSSENKRUPP AG -0.81% 11.66 Delayed Quote.-2.37%
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Financials (INR)
Sales 2020 1 528 B
EBIT 2020 122 B
Net income 2020 57 989 M
Debt 2020 996 B
Yield 2020 2,23%
P/E ratio 2020 10,7x
P/E ratio 2021 8,65x
EV / Sales2020 1,01x
EV / Sales2021 0,95x
Capitalization 541 B
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Mean consensus OUTPERFORM
Number of Analysts 23
Average target price 483,68  INR
Last Close Price 475,90  INR
Spread / Highest target 32,0%
Spread / Average Target 1,64%
Spread / Lowest Target -38,0%
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