Is ThyssenKrupp’s elevator money going to help out stock price?

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In the weak market environment, ThyssenKrupp’s stock price slipped significantly again.The share listed in the MDax plummeted by up to 17 percent in the morning, recovered only little until the end, and was still in double digits. The TKA share is one of the big losers on the German stock market in recent weeks anyway. Since the start of the Corona crash in February, the price has dropped by almost half. Hardly any German standard title has lost more during this period. The balance sheet is even more disastrous in the medium and long term.

The main reason for the drop

Share price went down more than 15 percent due to a press report, according to which the billions from the sale of the elevator division due to the Corona crisis can be invested less heavily than planned in the restructuring of the ailing group.

“In the medium term, the corona-related liquidity outflows are likely to result in the financial scope from the sale of the elevator business being far less than originally assumed,” quotes Handelsblatt from a letter from the Executive Board to the employees. It also says: “We are preparing solutions for this.”

ThyssenKrupp loans for liquidity

The letter may be related to a wide-ranging support from the state. For example, the group secured a loan of around one billion euros from KfW Bankengruppe, as was said on Thursday in corporate circles.

The group, which is facing major financial difficulties, needs state aid to bridge the time until the funds from the sale of its elevator business are received. ThyssenKrupp had sold its most profitable business segment to a consortium of financial investors for 17.2 billion euros. Approval from the antitrust authorities is still missing for the completion of the business. Corporate circles expect that the money can flow in the summer.

Thyssen Krupp actually wants to use the money from the sale to reduce debts and finance the restructuring of the group. The management board plans to present the concept for the new strategy to the supervisory board in May.

The recent outbreak has turned out to be a bull trap with today’s sale. Thyssenkrupp currently has more than 30,000 of its 162,000 employees worldwide on short-time work