* ThyssenKrupp says in exclusive talks to sell U.S. plant
* Sources say talks are with ArcelorMittal, Nippon Steel
* Company reaches rail cartel settlement in principle
* ThyssenKrupp pushes back results to Dec. 2 from Nov. 21
* Shares fall 2 pct
By Maria Sheahan and Arno Schuetze
FRANKFURT, Nov 20 Germany's ThyssenKrupp
is nearing a long-awaited sale of its U.S. steel plant
and has reached an agreement to settle a cartel lawsuit,
clearing the way for it to raise much-needed capital.
Shares in Germany's biggest steelmaker fell 2 percent,
however, as it became clear that the deal would not include the
company's lossmaking Brazilian factory.
ThyssenKrupp has been trying for more than a year and a half
to find a buyer for Steel Americas - comprised of the U.S. plant
and the steel mill in Brazil - which has drained cash from the
company for the past few years.
The deal comes as the United States experiences a phase of
re-industrialisation as low power prices encourage manufacturers
to boost output.
But the problems at Steel Americas run deeper than the price
of energy. The operation has suffered because it underestimated
the cost of supplying the Alabama plant with steel slabs from
Brazil, blaming operational problems, an appreciation of
Brazil's real currency and rising labour costs.
ThyssenKrupp said late on Tuesday it was pushing back the
publication of its annual financial results to Dec. 2 from Nov.
21 as the U.S. sale talks had entered the home stretch.
Early on Wednesday, it said it had agreed in principle to
pay German state-owned railway Deutsche Bahn damages
for its role in a rail cartel, and that existing provisions in
its accounts should cover the cost.
"ThyssenKrupp is slowly moving in the right direction," said
Jefferies analyst Seth Rosenfeld.
Finding a solution to its problems in the Americas and
settling the cartel issue would represent a major boost for
ThyssenKrupp Chief Executive Heinrich Hiesinger, who has
struggled to resolve lingering problems at Germany's biggest
steelmaker since taking the helm in early 2011.
Hiesinger has been trying to shift ThyssenKrupp away from
the volatile steel business into higher-margin products and
services such as elevators, submarines and factory components.
Three people familiar with the matter told Reuters that
ThyssenKrupp was in exclusive talks to sell the plant in
Calvert, Alabama to a consortium of ArcelorMittal and
Nippon Steel. One of the sources said that the bidders
were likely to pay $1.5 billion for the business.
"They are close to a solution. An agreement is possible in
the next week or two," one of the people told Reuters on
ArcelorMittal reiterated that it remained interested in the
plant, while Nippon Steel declined to comment.
Shares in ThyssenKrupp were down 2.3 percent at 18.955 euros
by 1110 GMT, making it the biggest decliner on Germany's
blue-chip DAX index, which was 0.1 percent lower.
ArcelorMittal was 0.2 percent higher at 12.52 euros.
"This looks slightly negative for ThyssenKrupp because it is
... keeping the problem (of Brazil). Also, a capital increase
should be imminent," MM Warburg analyst Bjoern Voss said.
BETTER THAN NO SALE AT ALL
Analysts have said a partial sale of Steel Americas would be
better than no sale at all, though it would be a disappointment
if the Brazil plant remains on ThyssenKrupp's books.
ThyssenKrupp owns 73 percent of the operation while
Brazil-based iron ore miner Vale holds the rest.
For ArcelorMittal, the world's biggest steelmaker, buying
the Calvert plant would make sense, analysts say, as it could
supply it with steel slabs from its rolling mill in Mexico, with
lower transport costs than those incurred by ThyssenKrupp for
shipments from Brazil.
ArcelorMittal could put the Mexican mill in a joint venture
with Nippon Steel, thereby lowering the amount of cash it has to
contribute in a joint deal to buy the Calvert plant, analysts at
Nomura said earlier this month.
The book value of Steel Americas as a whole has shrunk to
3.3 billion euros from more than 7 billion euros, and analysts
have said a sale of the U.S. plant alone could bring in proceeds
of between $1.5 billion to $2 billion.
ThyssenKrupp is expected to need another writedown on Steel
Americas following the deal.
It has already asked banks to waive loan covenants to avoid
losing a 2.5 billion euro credit line at the end of September
and said it would not rule out a capital increase once Steel
Americas and unresolved compliance issues had been dealt with.
Three bankers familiar with the matter told Reuters that
ThyssenKrupp is already stepping up preparations to raise its
capital by 10 percent in the short term.
"As this move has been widely expected, Thyssen should be
able to sell the new shares at a small discount, of maybe around
5 percent", one of the sources said.