Germany’s Thyssenkrupp expects the coronavirus disaster to trigger a new monetary squeeze, scuppering hopes that selling its elevator business would deliver a swift cash respite for the embattled agency, its administration board advised employees in a letter.
The elevator division was sold in February to ease the monetary strain on the conglomerate, which has struggled for years after ill-fated investments. However, the coronavirus crisis has dealt a blow before money from that sale arrives in June.
Sources stated last week that Thyssenkrupp had secured about 1 billion euros ($1.10 billion) in state support to tide it over until sale proceeds arrive.
Thyssenkrupp agreed on selling its elevators unit to a coalition of Advent, Cinven, and Germany’s RAG foundation for 17.2 billion euros in February, with proceeds expected to be acquired in June.
A source stated the loan from state development financial institution KfW would assist the conglomerate, which has suffered from sluggish demand for auto components after car manufacturers shut down manufacturing due to the pandemic. The mortgage expires on the finish of September
Car manufacturers and suppliers have scrambled to shore up their liquidity as sales in Europe tumbled by over 50% in March.
Thyssenkrupp has been pummelled in recent years by a downturn in the car market, multiple management adjustments, and an excessively complicated group structure.