REUTERS SUMMIT-Outokumpu should help itself, says state fund
(For other news from Reuters Nordic Investment Summit, click here)
HELSINKI, Sept 30 (Reuters) - Outokumpu should try to solve its own problems even though the steel company's heavy debts have raised the prospect it might need more money from shareholders at some stage, the head of Finland's state investment fund Solidium said.
Kari Jarvinen, Solidium's managing director, told the Reuters Nordic Investment Summit that the fund was making its investment decisions independent of political pressure to help out troubled Finnish companies.
"It is better that the company tries to sort out its problems by itself. The company already had a 1 billion (euros) right issue only one and half years ago," Jarvinen said when asked about Outokumpu's finances. "It is paramount that these companies find ways to be profitable in the future."
Solidium, which holds stakes in 11 Finnish listed companies such as Stora Enso and Sampo, was founded in 2009. Its mandate is to invest government money in businesses deemed to be of national importance.
Solidium invested 314 million euros ($425 million) in Outokumpu's share issue last year when the company needed money to buy ThyssenKrupp's stainless steel unit Inoxum. Solidium is now Outokumpu's second biggest shareholder with a stake of around 22 percent.
But Outokumpu might need more cash. The company, like other steelmakers in Europe, has faced weak demand as a result of customers holding back from purchases because of falling steel prices. At the end of the second-quarter, Outokumpu's debt-to-equity ratio was almost 121 percent compared with 103 percent at the end of March.
Solidium earlier this year backstopped a share issue of Talvivaara , lifting its ownership in the troubled nickel miner to 17 percent. ($1 = 0.7385 euros)
Follow Reuters Summits on Twitter @Reuters_Summits
For more summit stories, see )
($1 = 0.7385 euros) (Additional reporting by Terhi Kinnunen; Editing by Ritsuko Ando and Jane Merriman)
- Housing, jobs data weaken, but overall economic picture still upbeat
- Target cyber breach hits 40 million payment cards at holiday peak |
- 'Duck Dynasty' anti-gay fallout sparks debate on religion, tolerance
- UPDATE 3-Saab wins Brazil jet deal after NSA spying sours Boeing bid
- Zuckerberg to sell Facebook shares worth about $2.3 billion |