Talks between Thyssenkrupp and HKM, a potential investor in the steel JV, have broken down.

Thyssenkrupp said on Friday that investor CE Capital had broken off discussions about a possible purchase of the HKM Steel joint venture. This raises the risk of closing the asset and its approximately 3,000 employees.

We regret this. "It was and remains our main objective to sell shares in HKM to give the company, and its employees, prospects for the future," Thyssenkrupp Europe (TKSE), said in a press release.

We are always open to discussion and other buyers. After CE Capital Partners ended the talks, we will evaluate the situation in conjunction with our shareholders.

Thyssenkrupp had previously stated that it would be forced to close HKM in the event of a failed sale.

The German newspaper WAZ reported first that CE Capital has ended discussions over a possible acquisition of HKM. HKM is a joint-venture between Thyssenkrupp Salzgitter Vallourec.

HKM produces about 4 million metric tonnes of steel a yearly and a possible closure could help Thyssenkrupp’s steel division reach capacity reduction targets. This could be part of a restructuring in which Czech billionaire Daniel Kretinsky raises his stake in TKSE up to 50%. (Reporting and editing by Rachel More, with Christoph Steitz)

(source: Reuters)