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Fix steel unit or drop it, top Thyssenkrupp investor says

Fix steel unit or drop it, top Thyssenkrupp investor says
FILE PHOTO: The logo of Thyssenkrupp is seen near elevators in its headquarters in Essen, Germany, November 21, 2019. REUTERS/Leon Kuegeler/File Photo -
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LEON KUEGELER(Reuters)
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By Tom Käckenhoff

DUESSELDORF, Germany (Reuters) – Union Investment, a top-10 investor of ailing conglomerate Thyssenkrupp <TKAG.DE> raised pressure on management to soon present a plan for a turnaround of its steel unit, adding the group should otherwise drop the business.

Steel Europe, subject a highly cyclical market, made adjusted earnings before interest and tax of 31 million euros ($34 million) in the last fiscal year that ended Sept. 30, a decline of 95% year-on-year.

Thyssenkrupp has delayed a strategy announcement to December, angering workers who have been wondering about the division’s future following the collapse of a planned joint venture deal with Tata Steel <TISC.NS> earlier this year.

“If you can’t make money with steel in Europe for years then you have to ask yourself whether it makes sense to continue to operate that business,” said Michael Muders, fund manager at Union Investment. “Without positive cash flow at some point the question arises whether it is better to wind down the whole company,” he said.

(Writing by Christoph Steitz; Editing by Tassilo Hummel)

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