Private equity company Carlyle has left of a bidding process for the warship department of stricken corporation Thyssenkrupp , the German company stated on Tuesday.

Carlyle's withdrawal as a suitor for Thyssenkrupp Marine Systems (TKMS) is a major blow to Thyssenkrupp's restructuring, which likewise includes plans for a 50:50 steel joint venture with Czech billionaire Daniel Kretinsky.

We can verify that the investment firm Carlyle Group has informed us that it is withdrawing from the bidding procedure for the investment in Thyssenkrupp's marine department, Thyssenkrupp stated in a reaction to emailed concerns.

Thyssenkrupp shares fell as much as 3.7% on the news.

The business did not say why Carlyle had actually pulled out, including that it would now concentrate on a spin-off of the division, which builds submarines and frigates, however stays available to commercial partnerships.

Carlyle decreased to comment.

The German economy ministry stated it remained in talks with Thyssenkrupp about the future of its marine company however decreased to offer more details.

Sources told Reuters in June that Carlyle and state lending institution KfW remained in talks over joint acquisition of a majority stake in TKMS, stating the business was then valued at about 1.6 billion euros ($ 1.73 billion).

Thyssenkrupp President Miguel Lopez told experts in August that he was confident efforts to offer TKMS, either to a. consortium of buyers or through a spin-off, would succeed in the. coming months.

Thyssenkrupp, which likewise produces car parts and runs a. huge materials trading organization, said it remained in talks with. the federal government about possible involvement in TKMS, which. created nine-month operating earnings (EBIT) of 74 million. euros, up more than 2 thirds year on year.

We remain convinced that the naval sector can best take. advantage of the market's worldwide development chances by. operating independently, Thyssenkrupp said.

In addition, independence uses a great starting position. for possible nationwide and European debt consolidation..

(source: Reuters)