Swiss Steel categorically denies rumors of insolvency proceedings
Published: Friday, Oct 25th 2024, 08:00
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Swiss Steel has "categorically denied" rumors of insolvency proceedings. This is the ailing steel group's response to media reports that the company could soon run out of money despite the recent capital increase.
"Despite reports to the contrary, the Swiss Steel Group is in regular and constructive contact with all lenders," the Central Swiss company emphasized in a statement on Friday.
Last weekend, both the "NZZ am Sonntag" and the "SonntagsZeitung" reported that Swiss Steel's financial situation had deteriorated further. According to the reports, the company is on the verge of collapse. In banking circles, the question has therefore already been raised as to whether the steel manufacturer will be able to meet its credit terms next spring.
It was only in April that Swiss Steel raised fresh money with a capital increase. However, the company is still burning through cash, resulting in an adjusted operating loss (EBITDA) of around 21 million euros at the end of the first half of the year after a plus of 70 million euros in the same period last year.
Outlook for H2 unchanged
The Swiss Steel Group is continuing to implement its extensive strategy and restructuring program, the company wrote on Friday: "These efforts have already led to significant cost savings."
The outlook for the second half of the year published on August 14 remains unchanged, the Group emphasized. The market situation remains subdued. Customer production is low and demand is low.
The economic growth originally forecast for this year and the associated stabilization of the industry will likely be postponed until next year. "We therefore expect the second half of 2024 to remain volatile and subdued," Swiss Steel continued.
Speculation about new capital increase
The poor performance of the German automotive industry is a particular burden for Swiss Steel. Capacity utilization at the German plants is low, which is leading to losses.
According to the "NZZ am Sonntag", there is speculation on the market that another capital increase will soon be necessary. It is questionable whether main shareholder Martin Haefner will then step in again. At the beginning of the year, he had vehemently campaigned for the most recent capital increase and also supported the majority of it himself.
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