FRANKFURT--Nine bidders are considering a bid for the Steel
Americas unit that German industrial conglomerate ThyssenKrupp AG
(TKA.XE) has put up for sale, several people familiar with the deal
told Dow Jones Newswires Wednesday.
ThyssenKrupp put its U.S. steel mill in Alabama and a 73% stake
in Brazilian steel mill CSA up for sale to cut its debt pile, as
previously reported, and wants to sign a deal by the end of the
year, according to these people.
ThyssenKrupp, whose products include steel, elevators,
industrial plants and naval vessels, has piled up a net debt
position of 5.8 billion euros ($7.5 billion) as of the end of June,
which has cost the company its investment grade rating from
Standard & Poor's Corp.
The mounting debt is mainly due to huge cost overruns in the
construction of the two new steel mills in Brazil and in the U.S.,
which totaled a combined loss of around EUR1 billion in the fiscal
year ending September 30 according to media reports.
Suitors for Thyssen's plants include the world's largest steel
maker ArcelorMittal (MT, MT.FR, MT.AE), South Korean steel maker
Posco (PKX, 005490.SE), Japan's JFE Steel Corporation and Nippon
Steel (5401.TO), China's Bao Steel, as well as Brazilian steelmaker
CSN (SID), these people said.
Apart from these bidders, which might be interested in both
steel plants as suggested by some bankers, U.S. Steel and Nucor
(NUE) are in the running for the U.S. plant, two of the people
said, adding that Brazilian steel maker Ternium S.A.(TX) is
interested in the Brazilian plant.
A spokesman for ThyssenKrupp declined to comment on the
potential bidders, adding that the company can't provide
information on the timeframe for the sales process due to the
complexity of the transaction and the diverging interest of
potential investors. Spokespeople for U.S. Steel, ArcelorMittal and
the two Brazilian companies declined to comment.
Nippon, JFE, Bao and Posco could not be reached immediately for
comment.
ThyssenKrupp--whose products include steel, elevators,
industrial plants and naval vessels- wants to generate proceeds of
EUR7 billion for its North American and Brazilian plants, a target
bankers doubt it will get. Analyst Michael Shillaker from Credit
Suisse AG said in a research note published last week "we believe
consensus is moving to around EUR4 billion for the assets," adding
it appears the market "has moved its own views on the Americas from
unsellable back in June to sellable.
(Diana Kinch in Rio de Janeiro, Nico Schmidt in Frankfurt and
Matthew Day in New York contributed to this report.)
Write to Eyk Henning at eyk.henning@dowjones.com
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