Tata Steel looking at more options to revive European business
13 August 2016
Tata Steel on Friday said it has expanded its search for alternatives to sustaining its European business, including its UK operations, so as to emerge a strategic player in the European market.
Consequently, Tata Steel has "widened its conversation" and is talking to several players, including the German giant Thyssenkrup, group chairman Cyrus Mistry said without disclosing details on future plans.
The board of Tata Steel has decided to also look at alternative and more sustainable portfolio solutions for the European business.
Tata Steel, which has entered into discussions with strategic players in the steel industry, including Thyssenkrupp AG, has also initiated discussions with several companies to explore the feasibility of strategic collaborations through a potential joint venture.
However, the talks are currently at a preliminary stage and there can be no certainty of a transaction as the outcome depends on consultation and negotiations with various stakeholders.
"As far as our European operations are concerned, we are in talks with several players. Thyssenkrup is one of them. When we come to a finality in this subject we will disclose," Tata Steel's group chief financial officer Koushik Chatterjee told reporters on the sidelines of the 109th annual general meeting here this evening.
Tata Steel, which put its UK assets on the block on 29 March, after reporting heavy operational losses, has so far failed to get a buyer.
"We are looking at a more strategic play, which involves talking to premium steel companies. The idea is to make the business more sustainable in the future," he added.
Tata Steel is now looking to consolidate its European business he said, adding, "As part of the conversation, we look at assets and businesses on both sides."
Tata Steel and Thyssenkrup have been in talks for several months about a joint venture for their European operations, Chatterjee said, adding that the sale process of its speciality business is progressing well.
"We have received initial interest from several bidders and we are moving to the next stage," he said.
Besides, he said, the sale would also mean restructuring of operations of the loss-making business, including the pension scheme that made the operations all the more difficult.
"If there are any structural changes will take its own course. We are discussing with various stake holders, including the British government and other stakeholders like the government of Wales and so on," he said.
"There is a recognition that pension has a certain impact in a commodity business like steel, so we have to find a structural solution, which does not impact the business going forward," he added.