Thyssenkrupp calls for big­ger earn­ings share

New Straits Times - - BUSINESS / NEWS -

BER­LIN: Thyssenkrupp AG and Tata Steel Ltd are dis­cussing chang­ing the terms of their steel joint ven­ture in a way that could give Thyssenkrupp a big­ger share of earn­ings, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter.

While noth­ing had been de­cided yet, one pos­si­bil­ity be­ing con­sid­ered was to in­crease Thyssenkrupp’s eq­uity stake in the ven­ture and keep the vot­ing rights at a 50-50 split, said the peo­ple.

Thyssenkrupp was push­ing for changes to the deal af­ter profits plunged at Tata’s Euro­pean steel busi­ness, said the peo­ple.

The pos­si­ble changes fol­low weeks of mount­ing pres­sure on Thyssenkrupp’s chief ex­ec­u­tive of­fi­cer Hein­rich Hiesinger by ac­tivist share­hold­ers and labour rep­re­sen­ta­tives to get a bet­ter deal. When the ven­ture was an­nounced in Septem­ber, both com­pa­nies agreed to an equal split.

A spokesman for Thyssenkrupp said the com­pany would stick to its plan of hav­ing a fi­nal de­ci­sion on the ven­ture by the end of this month.

El­liott Man­age­ment Corp last week wrote to Hiesinger, who has pledged his fu­ture on achiev­ing a deal with Tata, warn­ing the ini­tial deal would rep­re­sent a shift of about €1.9 bil­lion (RM8.95 bil­lion) from Thyssenkrupp.

Ce­vian, the sec­ond-largest share­holder, has cal­cu­lated a gap of up to €2.5 bil­lion.

El­liott sug­gested that the dif­fer­ence could be made up with a cash pay­ment from Tata to Thyssenkrupp.

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