An investment holding firm with ties to Russian tycoon Viktor Vekselberg promised to invest "as much money as needed" in Schmolz + Bickenbach AG in order to prevent a restructuring of the $800-million debt pile of the ailing Swiss steelmaker.
In a statement on Sunday, Liwet Holding AG, which holds nearly 27 percent stake in Schmolz said the pledge is conditional as long as there is no change in the company's control.
The open letter is the latest salvo in a fight about Schmolz's future the direction between Liwet and Martin Haefner, a Swiss entrepreneur and the second-largest investor of the firm.
Shares of the steel manufacturer plummeted 60 percent this year in the wake of slumping demand from carmakers and new money is badly needed by the Lucerne-based company to ward off possible insolvency.
Previously, Haefner suggested raising its interest to 37.5 percent through a cash injection of 325 million Swiss francs ($326 million), but the Swiss Takeover Board rejected the proposal as inadequate and said it had to offer to buy the whole firm.
Liwet said in the statement that it is worried the offer dangled by Haefner would allow him to use the money to buy out the debt of the company rather than the operational needs of Schmolz.
If Haefner achieves his goal of hiking his interest, it would set the the stage for a so-called ownership restructuring in the notes, enabling bondholders to withdraw their principal from the company.
"This is not helpful to the business," said Liwet. "Rather, it allows Mr. Haefner to take control of the company at a lower price by violating the interests of other stakeholders."
In a Sunday interview with NZZ Am Sonntag, Haefner said it wasn't too late to find a compromise before the conference with other investors. "I want to help, but I have certain conditions and they have to be fulfilled in order for S + B to have a future," he said.
Liwet is welcome as a shareholder, said Haefner, while emphasizing that as a major financier he wants to take decisive influence. S+B is not in peril of collapsing immediately, and has enough money to pay its 10,000 employees through December, company spokesman Ulrich Steiner said late Sunday in comments to the Sonntagszeitung.
"We definitely do not have to go to Tuesday's bankruptcy judge," Steiner said. "From today's point of view, until January we have sufficient liquidity."
