NEW YORK ThyssenKrupp AG has listed Steel Americas as a discontinued operation, taking a 3.6-billion ($4.7-billion) write-down on the assets as the companys overall net loss soared to 4.67 billion ($6.07 billion) in its fiscal year ended Sept. 30 from a 1.29-billion loss the previous year.
The Essen, Germany-based steelmaker said it had taken the 3.6-billion impairment charge on its Steel Americas operations "due to the advanced status of the sale process for the plants in Brazil and the U.S."
"In connection with the classification of Steel Americas as a discontinued operation, a write-down to a fair value of 3.6 billion was necessary," the company said. "The fair value was determined from internal calculations and knowledge from the ongoing sales process."
ThyssenKrupp had said previously that it planned to recoup the book value of the assetsabout 7 billion ($8.9 billion)as it sought to sell or partner on its facilities in Calvert, Ala., and Brazil (amm.com, Aug. 28).
ThyssenKrupps board voted to terminate the appointments of executive board members Olaf Berlien, Jürgen Claassen and Edwin Eichler effective Dec. 31 based on the "overall responsibility" and "leadership culture" of the group. The company had announced last week that the board members had been asked to vacate their positions amid the struggling Steel Americas investment and a series of "corruption and cartel cases" (amm.com, Dec. 5).
"The Steel Americas project and the various compliance violations have not just caused immense financial damage. We have also lost trust and credibility," Heinrich Hiesinger, chairman and chief executive officer of the German steel company, said in a statement. "With the changes on the executive board, the supervisory board has sent out a clear signal for a fresh start."
Excluding Steel Americas and stainless division Inoxumwhich is merging with Outokumpu Oyj (amm.com, Nov. 7)ThyssenKrupps earnings before interest, taxes, depreciation and amortization (Ebitda) totaled nearly 2.43 billion ($3.15 billion) in the 12 months ended Sept. 30, down 40 percent from 4.03 billion the previous year due mostly to the difficult market environment weighing on the Steel Europe and materials services segments.
The company confirmed its "performance orientation" strategy. "With the completion of our portfolio optimization program and the sale of Steel Americas, the weight of our capital goods operations within the group will increase significantly," Hiesinger said. The company expects its continued efficiency program to cut costs by a cumulative 2 billion ($2.6 billion) over the next three years.
As part of its restructuring plans, the company announced that the plant technology and marine systems divisions will form a joint operation, called Industrial Solutions, effective Jan. 1.
Elfi Middelbeek, London, contributed to this story.