* Shares soar as Terni mill fetches more than expected
* Sells Terni and other assets back to ThyssenKrupp
* Capital to be shored up by 650 mln euro rights issue
* Deal seen as major coup for Nokia's former CEO Ollila
(Recasts with investor comments, chairman background)
By Jussi Rosendahl
HELSINKI, Dec 2 Shares in Finland's Outokumpu
, the world's No. 1 stainless steel maker, jumped more
than 30 percent as investors welcomed its plan to shore up
finances by selling some assets, securing a loan and issuing new
Analysts said that Outokumpu had achieved a
better-than-expected price for its mill in Terni, Italy, which
it is selling, along with alloy unit VDM, back to ThyssenKrupp
in exchange for cancelling a 1.25 billion euro ($1.7
Loss-making Outokumpu, hit hard by Europe's economic
slowdown and by overcapacity in the industry, also said it will
raise 650 million euros through a rights issue and that it had
secured a new 500 million euro loan facility.
The stock rose nearly 20 percent by 1320 GMT, but is down
some 70 percent since it bought ThyssenKrupp's stainless steel
unit Inoxum last year. Outokumpu is keeping Inoxum's five German
production plants - one of which it plans to close, one in the
United States, one in Mexico and one in China.
Fund manager Mika Heikkila at Taaleritehdas Asset Management
said the price it realised for the assets was higher than he had
feared when the EU monopoly watchdog told Outokumpu to sell
Terni as a condition for approving the Inoxum deal.
"For the Terni mill, it could have been a deal at a bottom
price at the bottom of the market cycle, so against
expectations, it was a good deal for Outokumpu," he said.
"The deal also cleverly ties together the asset sales and
the rights issue. But I still wasn't fully sure where the shares
would point in the market opening today," Heikkila said. His
fund owns about 0.3 percent of Outokumpu.
Thyssen shares dropped 9 percent.
"The deal as such was good, but the rights issue
announcement also tells us that the (Outokumpu) management sees
a worse 2014 than earlier anticipated," Heikkila said.
Analysts raised their estimates,, with Pohjola Markets
upgrading its rating to "hold" from "reduce" and Inderes Equity
Research lifting its view to "accumulate" from "sell".
The capital restructuring package was also seen as a success
for Jorma Ollila, former Nokia CEO, who was elected
this year as the chairman of Outokumpu's board.
"The board must have been working intensively on this deal
and Ollila might have been very hands-on," Heikkila said.
Ollila has been widely accused in Finland of Nokia's
smartphone troubles that recently culminated in a sale of its
entire mobile phone business to Microsoft.
($1 = 0.7345 euros)
(Editing by Louise Ireland)