* ThyssenKrupp shares fall 5 percent
* Gearing rises in Q3, could breach covenant on undrawn loan
* ThyssenKrupp to ask banks for waiver of gearing covenant
FRANKFURT, Aug 14 Shares in ThyssenKrupp
fell on Wednesday as the steelmaker's deteriorating
finances and failure to sell its loss-making Steel Americas
division fanned investors' concerns that it will have to raise
capital sooner than planned.
Germany's largest steelmaker late on Tuesday reported a 362
million euro net loss for its financial third quarter and said
its equity was shrinking, putting it at risk of losing a credit
line and raising pressure on the company to sell new shares.
"With the Americas seemingly stalling, and risk of the
company attempting a capital increase without clarity on this
issue, we have increased our short-term sense of caution,"
Credit Suisse analyst Michael Shillaker said.
ThyssenKrupp shares were down 5 percent at 16 euros ($21) at
0815 GMT, making them the second-biggest decliner on Germany's
blue-chip DAX index.
ThyssenKrupp has been trying for more than year to find a
buyer for the mills in Brazil and the U.S. state of Alabama,
together called Steel Americas, which have caused losses and
sapped capital at the company.
By the end of June, its gearing ratio - how much debt it has
compared with equity - had jumped to 185.7 percent from 148.2
percent. That compares with only 31 percent at ArcelorMittal
, the world's biggest steelmaker.
If ThyssenKrupp's gearing remains above 150 percent at the
end of its financial year in September, banks could cancel a 2.5
billion euro undrawn credit line because the group would be in
breach of loan covenants.
ThyssenKrupp said it would ask the banks that granted the
credit line, which include Commerzbank and BNP Paribas
, to waive the covenant.
ThyssenKrupp tried to allay investors' concerns over its
financial strength, saying that even if banks cancelled the
credit line, which it said was unlikely, it would still have
enough liquidity to cover debt maturities.
Its liquidity, in the form of cash and undrawn credit lines,
declined to 7.2 billion in the quarter to June from 8 billion
euros in the previous three months. Gross financial liabilities
repayable through September 2014 are 2.1 billion euros.
($1 = 0.7555 euros)
(Reporting by Maria Sheahan; Editing by Erica Billingham)