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Industry

ThyssenKrupp to lose billions in steel plant sales

German heavy engineering giant ThyssenKrupp has been bracing for multi-billion-euro (dollar) losses over the planned sale of its steel plants in the Americas. Construction defects will cost the firm dearly.

Speculation about Germany's ThyssenKrupp facing multi-billion-euro (dollar) losses over its steel plants in the Americas entered a new round on Wednesday as the Süddeutsche Zeitung newspaper reported about various "horror scenarios" being looked into by the company's management.

The report centered around the firm's planned sale of its two steel works in Brazil and the US which might secure ThyssenKrupp only a fraction of its initial investment in the Americas.

The two plants in question had cost the company some 12 billion euros ($15.5 billion), not least due to enormous financial resources that had to be spent on removing serious construction defects.

Who's to blame?

According to the newspaper report, ThyssenKrupp reckoned with no more than between one and four billion euros in sales proceeds, leaving the firm with huge losses in any case.

The Süddeutsche Zeitung said the company was frantically working to identify those responsible for the overseas steel plant disaster. The daily added investigations had been focusing on board members around former CEO Ekkehard Schulz.

It said the advisory council was studying reports according to which answers to initial questions about the profitability of the two steel plants had been "overly optimistic, incomplete and partly wrong."

The company's steel operations have in general been facing rising costs, shrinking margins and weak demand in North America and Europe.

hg/mz (dpa, AFP)