Warship maker TKMS renegotiates project guarantee terms from parent Thyssenkrupp, signaling tougher conditions as the business prepares for a separate listing. Thyssenkrupp to spin off 49% of TKMS on October 20, highlighting the value of defense assets in ongoing restructuring efforts.

Thyssenkrupp has issued parent company guarantees worth around 10 billion euros to TKMS, safeguarding division’s orders. Fixed annual fee of 85,000 euros per guarantee has resulted in stable costs for TKMS. Spin-off and listing to unlock shareholder value and provide TKMS access to capital markets.

TKMS secures 2.5 billion euros in bank guarantees. Renegotiated terms for existing parent company guarantees with fixed annual fees. Plans to avoid drawing on further guarantees, seeking alternative arrangements. Commitments for bank guarantees expected to cover needs through September 2027.

Jefferies predicts TKMS shares could trade at around 36.55 euros apiece, based on a 2.3 billion euro valuation. Renegotiated terms with escalating fees begin in 2025. Unclear how many projects are covered by guarantees. TKMS aims to avoid further guarantees, seeking other arrangements with clients and banks.

Read more at Yahoo Finance: Thyssenkrupp renegotiates 10 billion euros in unit TKMS’ guarantees before spin-off