Reuters reported that credit rating agency Moody’s downgraded ThyssenKrupp’s debt to “junk” status due to challenging market conditions and profit losses in its Brazil and US sites.

ThyssenKrupp replied that its strategic programme to improve earnings and to reduce debt is on the track. The performance of Thyssenkrupp was slow sharply as cool down in China and weak demand in Europe.

Meanwhile, cost overruns, poor project management and weak demand in its US plant have piled up debts.

Moody’s foresee the possible loss from selling the Steel Americas and that would drag the sales time longer than expected and make additional losses.

Aside from the sales of Steel Americas, ThyssenKrupp has divested stainless steel unit Inoxum and some small holdings, once all these deals are done; only about 30% of ThyssenKrupp’s business will come from the steel sector.