ThyssenKrupp prepares for capital measures - sources
* Asks banks to be ready for 10 pct cap hike - source
* Newspaper says ThyssenKrupp preparing hybrid bond
* Investors seen demanding clarity on Steel Americas first
* ThyssenKrupp declines comment
By Arno Schuetze and Maria Sheahan
FRANKFURT, Sept 5 (Reuters) - German steelmaker ThyssenKrupp AG is making final preparations for a capital-raising it could launch as soon as it has decided on a plan for its ailing Americas business, banking sources said.
Pressure has been rising on Chief Executive Heinrich Hiesinger to raise cash as ThyssenKrupp, a symbol of Germany's industrial prowess, is at risk of breaching loan covenants when its financial year ends on Sept. 30.
But it is not yet clear how and when he could make a move. Several capital markets bankers said ThyssenKrupp was carrying out the necessary preparation work in line with its various options.
"If I was CFO (chief financial officer), I'd already have that tucked away in a drawer by now," one banker said on Thursday.
ThyssenKrupp declined to comment beyond pointing to Hiesinger's most recent remarks.
He said last month he may not wait for a Steel Americas deal to materialise before addressing the group's financial situation, after his initial plan to first find a buyer for the loss-making business was thrown off course as talks to offload the unit dragged on for more than a year.
During that time ThyssenKrupp's finances have deteriorated, so that by the end of June its gearing ratio - how much debt it has compared to equity - had jumped to 185.7 percent from 148.2 percent three months earlier.
If it remains above 150 percent at the end of its fiscal year in less than four weeks' time, banks could cancel an undrawn 2.5 billion euro ($3.3 billion) credit line because of a breach of covenants, and ThyssenKrupp has said its finances were already causing alarm bells to ring at some of its customers.
One person close to ThyssenKrupp said the company had asked banks to be ready to take part in an increase in its share capital by 10 percent, which would raise about 800 million euros at current prices, in an accelerated bookbuilding.
Sources said also last month ThyssenKrupp was already in talks with hedge funds to persuade them to buy into any issue of new shares.
Bankers say such a capital increase with no subscription rights could be thrown together within two or three weeks, though anything above 10 percent would likely extend to two to three months because it would include a rights issue, requiring a prospectus and regulatory approval.
Yet a 10 percent capital hike would not be nearly enough to fix ThyssenKrupp's finances, especially if there is no inflow of cash from the sale of Steel Americas.
German daily newspaper Handelsblatt said ThyssenKrupp was also planning a hybrid bond - one which combines elements of debt and equity - worth as much as 1 billion euros in addition to a share issue.
A hybrid bond would be expected to carry an interest rate of more than 8 percent to justify the risk to investors - making it expensive for ThyssenKrupp.
In addition, it could be counted as debt rather than equity under new guidelines by credit rating agency Moody's, which already has a "junk" rating on ThyssenKrupp's debt.
Equinet analyst Stefan Freudenreich said he still believed a hybrid bond would make sense because it would help tide over ThyssenKrupp financially until it gets an expected cash inflow from the sale of Steel Americas and the repayment of a loan note it granted Finnish steelmaker Outokumpu.
Either way, equity capital markets bankers say they expect investors will demand clarity on ThyssenKrupp's plans for Steel Americas before they offer up any cash, even if that just means putting the sale on ice for the moment.
Earlier this week, a source told Reuters there was a chance ThyssenKrupp could end up keeping Steel Americas as a "Plan B" option.
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