* Thyssen has said may need capital increase
* Talks with investors at an advanced stage -source
* Magazine says CEO, CFO spoke to Soros, Paulson
By Matthias Inverardi
DUESSELDORF, Germany, Aug 22 German steelmaker
ThyssenKrupp, which has said it risks breaching loan
covenants, is in talks with hedge funds to persuade them to buy
into an issue of new shares, two people familiar with the matter
One of the sources, who spoke on condition of anonymity
because the negotiations are confidential, told Reuters on
Thursday the talks were at an advanced stage.
Earlier in the day, German monthly Manager Magazin cited
company sources as saying Chief Executive Hiesinger and Finance
Chief Guido Kerkhoff first approached some hedge funds in March
and revived talks about a cash call in mid-July.
ThyssenKrupp needs capital as it aims to shift its strategy
from steelmaking to technology, while struggling to sell its
unprofitable Steel Americas unit that consists of steel mills in
Brazil and the U.S. state of Alabama.
The company has not yet specified whether the mooted capital
increase would include a rights issue for existing shareholders.
A spokesman for ThyssenKrupp declined to comment and pointed
to previous comments from its management saying a capital
increase was an option.
CEO Hiesinger said last week the group could seek cash from
shareholders even before it sells Steel Americas if customers
grew too concerned about ThyssenKrupp's finances.
Funds overseen by George Soros and by John Paulson were
named by Manager Magazin as having been contacted. Other
investors who could be interested include David Einhorn's
Greenlight Capital, York Capital as well as Andreas Holvorsen's
Viking Global Investors, according to the magazine.
Shares in the company extended their gains and were up 4.3
percent at 16.30 euros at 1405 GMT, the second-largest gainer on
the blue-chip DAX index, which was up 1.4 percent.
Greenlight Capital declined to comment. Soros Fund
Management, Paulson & Co, Viking and York Capital Management did
not immediately respond to requests for comment.