German conglomerate Thyssenkrupp AG has completed the sale of its Euro 17.2 billion (Rs 15.2 lakh crore) elevator business on Friday to a consortium of private equity firms led by Advent International and Cinven.
“Divesting the elevator business with its more than 50,000 employees was a tough decision that was not easy for anyone but it was indispensable in the interests of the whole group of companies,” said ThyssenKrupp AG’s chief executive officer Martina Merz.
The group had signed an agreement with the consortium of equity firms on the purchase of the elevator business in February 2020, as a restructuring strategy to reduce debt to the net cash position and improve the balance sheet ratios.
“Thyssenkrupp will be able to considerably reduce past balance sheet burdens. Part of the proceeds will be used selectively to develop the businesses where attractive target returns can be achieved,” the company’s statement said.
The group will be continuing to focus on improving the performance of the remaining businesses. We wish our Elevator colleagues continued success and all the best for the future,” Merz said.
To combat COVID-19 and its economic impact, German state-owned development bank Kreditanstalt für Wiederaufbau (KfW) had introduced the KfW special program 2020, during March this year. To secure liquidity during this crisis Thyssenkrupp AG had entered into a Euro 1 billion credit facility under the KfW special program.
“The company did not draw on this credit facility and it will end with the closing of the Elevator transaction”, the group said.
The closing of the transaction has also led to a personnel change among the employee representatives on the supervisory board of ThyssenKrupp AG. Susanne Herberger, chairwoman of the works council of Thyssenkrupp Elevator AG, will be succeeded by Tekin Nasikkol, chairman of the general works council of Thyssenkrupp Steel Europe AG.
Source: Economic Times