* Says to raise capital by up to 10 percent
* ArcelorMittal, Nippon Steel buy U.S. plant for $1.55 bln
* ThyssenKrupp swaps Terni, VDM for Outokumpu loan note
* ThyssenKrupp posts 1.5 bln euro annual loss
* Says to pay no dividend to shareholders again
By Maria Sheahan and Tom Käckenhoff
FRANKFURT, Nov 30 ThyssenKrupp is selling its U.S. plant to two rivals in a long-awaited deal to help extricate the German steelmaker from an ill-fated boom-year expansion plan, and said it plans to raise up to 1 billion euros ($1.36 billion) in a share sale.
Germany's largest steelmaker, whose empire stretches from shipyards to elevators, said late on Friday it would sell its U.S. steel finishing plant in Calvert, Alabama, to ArcelorMittal and Nippon Steel & Sumitomo Metal Corp for $1.55 billion.
It also said it would increase its capital by as much as 10 percent in a sale of new shares, which could raise close to 1 billion euros at the current price, to bolster its balance sheet and help reduce a crippling debt burden.
ThyssenKrupp has been trying for more than a year and a half to find a buyer for its Steel Americas unit - comprised of the U.S. steel finishing plant and steel slab mill CSA in Brazil - which has drained billions from the company for the past few years and been an obstacle to raising fresh funds.
But the sale of the U.S. plant in Calvert is not the coup that ThyssenKrupp Chief Executive Heinrich Hiesinger had initially hoped for. It still leaves the group with its 73 percent stake in Brazil's CSA, which accounted for the bulk of almost 13 billion euros ThyssenKrupp has spent on Steel Americas.
Hiesinger, who took the helm of the group in 2011, asked investors to be patient and give him more time to turn around Germany's biggest steelmaker.
"When you restructure a company that has manoeuvred itself into a deep crisis over a period of many years, it's also going to take years to put the company on a sound footing," Hiesinger told journalists during a news conference on Saturday.
Hiesinger has been trying to shed assets with 10 billion euros of annual revenue to shift ThyssenKrupp away from the volatile steel business into higher-margin products and services such as elevators, submarines and factory components.
But he has fought an uphill battle since he became CEO as the company was hit by scandals, while finances at the industrial conglomerate, a symbol of Germany's industrial prowess, steadily deteriorated.
At the end of its financial year through September, ThyssenKrupp had to ask banks to waive loan covenants to avoid losing a major credit line.
And in another unexpected setback, ThyssenKrupp said on Friday it was forced to take back Italian steel plant Terni and high-performance alloy unit VDM, parts of the stainless steel business it sold to Finland's Outokumpu last year.
Losses at Steel Americas, a regulatory fine and restructuring costs caused a third straight annual loss at ThyssenKrupp for the financial year through the end of September, though the loss narrowed to 1.5 billion euros from 5 billion a year earlier.
ThyssenKrupp said it would therefore pay no dividend to shareholders for a second year in a row but said its savings programme and growth at its non-steel businesses should help it make significant progress towards breaking even this year.
Its gearing - the ratio of its net debt to equity - deteriorated further to 200.6 percent at the end of September from 185.7 percent three months earlier, compared with only 34 percent at ArcelorMittal, the world's biggest steelmaker.
ThyssenKrupp said it aimed to get its gearing back below 100 percent eventually, helped by its capital increase and the cash from the sale of the Calvert plant.
Finance chief Guido Kerkhoff said ThyssenKrupp would hold on to Brazilian mill CSA for now rather than continuing to try to find a buyer and focus on improving its performance.
To avert a drop-off in business at the mill, which has been sending part of its output to the U.S. plant in Calvert, the deal with ArcelorMittal and Nippon Steel includes a six-year agreement to buy 2 million tonnes of steel slab per year from CSA, or 40 percent of the Brazilian mill's capacity.
ArcelorMittal and Nippon Steel are financing the purchase, which ArcelorMittal said would yield about $60 million of annual savings, through a combination of equity and debt.
The Calvert plant will sell about half of its production to the North American automotive industry, while the other half will go to the energy sector, where a boom in natural gas exploration has boosted demand for steel pipes and tubes.
"The plant is new and our biggest advantage is its location. There are many Japanese automakers' plants nearby," Nippon Steel Executive Vice President Shinya Higuchi told a news conference in Tokyo early on Saturday.
"We expect the plant will start with a full utilisation rate and turn profitable soon, as we already have a solid customer base there," he said.
Nippon Steel has been stepping up global expansion and has said it would consider adding facilities in North America, Indonesia and India, areas where Japanese automakers are accelerating their production.