ThyssenKrupp gets break, obtains extension of credit lines
ThyssenKrupp of Germany received the backing of banks to extend its existing credit lines worth EUR2.5 billion. This comes at a time when the steelmaker is facing billions of Euros worth of debt and an ailing business in the Americas, according to the German daiy WirtschaftsWoche.
There was increasing pressure on the company's CEO Henrich Hiesinger to raise funds as the company was nearing default on its loan agreements by September 30. Now, a consortium of banks had agreed to renew its credit lines, which was first reported in the German business daily who did not identify the source of the information.
In a separate report, WirtschaftsWoche also reported that the steel company was planning a share sale that can raise as much as EUR1.6 billion. The fundraiser would be done through a so-called hybrid bond that would have an 8% interest.
These measures are viewed in a positive light by German investors and this can even generate more funds that what was projected for the fund raiser. Despite this last minute fundraising activity, the company may still be unable to sell off its Brazilian subsidiary by its scheduled end of September target, according to another German newspaper, Frankfurter Allgemeine Sonntagszeitung.