December 11, 2012 / 8:46 AM / 5 years ago

CORRECTED-UPDATE 1-ThyssenKrupp CEO vows to fix steelmaker's "disaster"

(Corrects currency conversion in second paragraph to $6.08 billion from $60.8 billion)

* Thyssen CEO says a great deal has gone wrong

* Comments come after massive 4.7 bln euro loss

* Steel Americas value written down to 3.9 bln eur

ESSEN, Germany, Dec 11 (Reuters) - ThyssenKrupp Chief Executive Heinrich Hiesinger vowed to clean up Germany’s top steelmaker after recent losses and corruption allegations prompted him to axe half his management board.

“I’m not going to talk anything up here, because it is obvious that a great deal has gone wrong in the past,” he told journalists at a news conference on Tuesday, the day after Thyssen reported a 4.7 billion euro ($6.08 billion) annual loss.

Thyssen also decided not to pay shareholders a dividend for the first time in the company’s history, pushing its shares down by 1.8 percent in early trade. They later reversed, trading 1.6 percent higher at 16.55 euros at 0843 GMT.

The loss was caused primarily by a 3.6 billion euro writedown on its steel mills in the United States and Brazil, which Thyssen is trying to sell.

The book value of the mills, bundled in the Steel Americas business, is now 3.9 billion euros, well below the 12 billion euros Thyssen invested in the unit over the years.

The division had been meant to give ThyssenKrupp a foothold in the Americas, but costs for the mills ran far over budget while demand for the steel they made subsided.

Thyssen said management at the time based its decisions on overly optimistic projections and took too long to inform the supervisory board of problems with the project, which eventually forced Hiesinger’s predecessor Ekkehard Schulz to step down.

“If we now just continue with business as usual, we will be making a great mistake,” Hiesinger said, adding the Steel Americas “disaster” showed Thyssen’s leadership culture had failed.

$1 = 0.7736 euros $1 = 0.7736 euros Reporting by Maria Sheahan; Editing by Erica Billingham

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