Swiss Steel, a prominent player in the steel industry based in Lucerne, is currently facing significant financial challenges.
The company's share price has dropped by 11 percent, falling below CHF 2 for the first time since a reverse split. This decline has resulted in a loss of CHF 450 million in value since a capital increase in April.
The situation has become more precarious as the company is not only facing pressure from banks but also from suppliers who are now demanding advance payments. This shift in payment terms indicates a growing concern about Swiss Steel's financial stability.
The management has acknowledged the pressure from suppliers and attributed part of the situation to negative media coverage. CEO Frank Koch's optimistic outlook for a recovery in the steel market has proven to be misguided, and the company's anticipated improvement in earnings for 2024 has not materialized.
Major stakeholders, including significant shareholder Martin Haefner, are expressing frustration over the company's performance. The board's confidence in CEO Frank Koch remains intact, but the ongoing negotiations with banks are critical as the company navigates this turbulent period.
Swiss Steel is at a crossroads, facing challenges from suppliers, banks, and stakeholders, and the pressure to deliver results intensifies.