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thyssenkrupp break up plans face economic, financial hurdles - Report

Steel News - Published on Fri, 11 Jan 2019

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Reuters reported that Thyssenkrupp faces risks ranging from economic uncertainty to cartel fines in 2019, potentially complicating a planned spin off of the German company’s capital goods business which has so far left some investors unconvinced. While the break-up plan is backed by the Alfried Krupp von Bohlen and Halbach foundation and Cevian, Thyssenkrupp’s two biggest shareholders, other investors question whether it will solve the German conglomerate’s bigger problems. Some analysts say fears of a global economic downturn as well as potential fines over alleged cartel agreements in Germany could also hit Thyssenkrupp at a time of already stretched finances.

Thomas Hechtfischer, managing director of shareholder advisory group DSW, which represents 1 percent of the group’s voting rights at its annual general meeting said “Overall, I still don’t see how Thyssenkrupp will get anywhere. 2019 won’t be the only transition year for the group. I suspect there will be quite a few.”

One top-20 shareholder said Thyssenkrupp’s management still needed to prove that the break-up will result in a smaller, more agile set-up, adding “Simply announcing a breakup doesn’t change anything.”

Thyssenkrupp, whose AGM is scheduled for Feb. 1, plans to get most of the break-up work, including a legal separation as well as top management appointments, done this year before shareholders are to approve the split in a year’s time.

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Posted By : Joykumar Irom on Fri, 11 Jan 2019
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