Thyssenkrupp overhaul must happen faster due to COVID-19: CEO

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© Reuters. FILE PHOTO: Thyssenkrupp's logo is seen outside elevator test tower in Rottweil © Reuters. FILE PHOTO: Thyssenkrupp’s logo is seen outside elevator test tower in Rottweil

DUESSELDORF (Reuters) – Thyssenkrupp (DE:) has less time for a wide-ranging restructuring plan than previously thought as the coronavirus pandemic is significantly burdening the already ailing conglomerate, its chief executive said in a note to staff.

“The difficult economic situation at Thyssenkrupp is being significantly intensified by corona. The company is in a serious situation,” Merz said in the note dated May 8 and seen by Reuters.

Late last month the group secured about 1 billion euros ($ 1.1 billion) in state aid to tide it over until it receives the money from the sale of its elevator division, two sources told Reuters.

In her note, Merz said restructuring moves, cost cuts and, above all, measures to increase sales that the group had planned to implement over the next two to three years needed to be implemented significantly faster due to the pandemic.

“Moving boundaries, thinking boldly, not ruling anything out – we really need to buckle down to the next plan,” she added.

Merz said the longer the pandemic lasted the more it was eating up the expected proceeds from the sale of its elevators unit, adding management would discuss this with the supervisory board on May 18.

Thyssenkrupp in February agreed to sell its elevator unit to a consortium led by Advent and Cinven for 17.2 billion euros and to reinvest 1.25 billion euros of the proceeds in the business.

The closing, which Advent and Cinven said would take place by the end of September, could already happen over the summer, Merz said. Until then the group is bleeding cash, Merz said, adding that was why the company had talked to state-owned bank KfW about additional funds.

Thyssenkrupp is scheduled to publish second-quarter results on May 12. Merz said she did not expect industrial demand to recover soon.

($ 1 = 0.9225 euros)

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