Schmolz + Bickenbach cites ‘steel crisis’ as it looks to raise cash

Swiss steelmaker Schmolz + Bickenbach said Wednesday it is planning a capital increase of up to CHF350 million ($354 million), while slashing its full-year earnings forecast due to poor demand.

“The weakness in the most important end markets, such as the automotive industry, which went beyond the usual cyclicality, led to a crisis in the steel industry that Schmolz + Bickenbach was unable to escape,” the company stated. “The rapid development as well as the depth and duration of this weak demand require measures to strengthen equity.”

Swiss car dealership billionaire Martin Haefner has pledged to contribute up to CHF325 million through BigPoint Holding, a company he controls. However, Haefner said he would only provide the money if he gets a stake of at least 37.5% in S + B, is freed from being required to submit a mandatory takeover offer, and is allowed to have two BigPoint Holding employees on the S + B board of directors.

S + B also lowered its earnings forecast for the 2019 financial year in light of business developments since the beginning of September. Adjusted EBITDA is now expected to be below the range of Eur70 million to Eur100 million issued in September.

“After the usual seasonal slowdown in the summer months, demand in September recovered from its lowest point in August, but at a much lower rate than expected. A noticeable recovery in order intake and order backlog also failed to materialize in the first weeks of the fourth quarter,” the company said.

— Annalisa Villa