2023-10-14 21:30:00
Swiss Steel in Existenznot
The company, which is dominated by the three major shareholders Peter Spuhler, Viktor Vekselberg and Martin Haefner, is losing income. Things no longer seem to be possible without state aid.
Peter Spuhler, Swiss Steel’s main shareholder, has to use his connections to Bern.
Photo: Gian Ehrenzeller (Keystone)
It was barely four years ago that the Swiss steel manufacturer Swiss Steel, which was then called Schmolz + Bickenbach, was on the verge of bankruptcy. The share price fell to unimagined depths: the shares were still worth 20 centimes.
Now it’s that time again, only worse. After another fall in prices, the shares are only worth 10 centimes. Renovation is needed again – and probably also government help.
Admittedly, the Lucerne steel makers didn’t have much luck. The war in Ukraine led to drastic increases in energy costs and caused revenues to fall by a fifth and order inventories to fall by more than a third. Operating profit even fell by 85 percent.
The bottom line is that Swiss Steel made a loss of almost 100 million francs in the past twelve months. And obviously investors don’t believe in a quick improvement. The company, which had equity of 500 million francs at the end of the second quarter, is now worth just 300 million on the stock market.
At the end of August, Vice President Svein Richard Brandtzæg announced his resignation as of October 5th. On September 18th, the company management abandoned all annual targets – and instead issued a profit warning. At the same time, it announced that profitability also fell short of expectations in July and August.
At its last board meeting, no successor for Brandtzægs could be presented. However, it was recognized that additional renovation measures were needed.
Peter Spuhler as a key figure
The company is controlled by three major shareholders: the Russian oligarch Viktor Vekselberg, Amag owner Martin Haefner and more and more from Stadler boss Peter Spuhler. The internationally sanctioned Vekselberg hardly plays a role anymore.
In June, Spuhler rushed to the aid of Amag owner and Swiss Steel major shareholder Martin Haefner. He bought a good 8 percent of Swiss Steel shares from him. This was important because otherwise Haefner would have had to make a takeover offer to Vekselberg and the public shareholders. This was a requirement of the Federal Financial Market Supervisory Authority in 2019.
Viktor Vekselberg, who fought with Amag owner Martin Haefner over control of Swiss Steel in 2019, hardly plays a role anymore.
Photo: Dmitri Lovetsky (AP Photo)
Otherwise the situation will become increasingly uncomfortable. Comprehensive strategy and restructuring measures are already underway at Swiss Steel. Management wants to continue this consistently. Seven plants in Eastern Europe are to be sold and the German stainless steel plants are to be renovated.
There is also talk of “cost and liquidity stabilization”. Personnel costs, including those of management, should be reduced, inventory reduced and, if possible, all non-essential expenses cut.
Call for help from the state
But what seems most important at the moment is Spuhler’s political connections to Bern. Rescue efforts are underway in the Federal Palace. The SVP National Councilor Diana Gutjahr and SP Councilor of States Roberto Zanetti have two Motions to support steel production in Switzerland submitted. This is particularly about the steelworks in Gerlafingen SO, where Zanetti was formerly mayor.
Now you can ask yourself why Switzerland should provide state support for steel production. In any case, the fact is that everyone abroad does that. Germany is trying to maintain the steel industry despite high energy costs. And protectionism is openly practiced in the USA.
“The high energy prices – electricity and gas – are increasingly threatening our competitiveness, because the rules of the game are changing due to the EU support and funding measures for energy and decarbonization,” says Swiss Steel spokeswoman Ania Berger. That’s why the company relies on politics.
The motions to secure metal cycles are therefore an important milestone in carrying the metal processing industry into the future, says Berger. The basic industry is a crucial driver of the Swiss circular economy and makes a significant contribution to prosperity.
Thanks to this justification, Zanetti’s motion passed in parliament. Gutjahr’s case has not yet been treated. It is unclear whether the Federal Council will act in time before Swiss Steel has to give up its Swiss production.
Found an error? Report now.
1697362007
#Steel #makers #facing #tough #austerity #measures #Swiss #Steel #dire #straits