Tata Steel Sounds Out 190 Entities for UK Sale
Co sold its long products business to Greybull Capital last week for £1
Mumbai: Tata Steel reached out to 190 potential financial and industrial investors for the sale of its UK business, the company said in a regulatory filing with the BSE on Monday, as it officially started courting possible buyers amid one of the deepest slumps in the steel market. The company had begun the sale process of its entire UK operations a week earlier, giving up on efforts to turn around the business it had bought as part of the takeover of Corus at the height of the commodity boom in 2007. The development came after the company suffered losses for years amid poor demand and cheap Chinese imports.
Tata Steel sold its long products business to Greybull Capital last week for £1, a move that will reduce daily cash burn, but not debt on the books. It is now left with strip business in Port Talbot and related rolling mills.
In its statement to the BSE, the company said that it has named in- vestment bank Standard Chartered as additional adviser to the sale process to ensure coverage and reach of the universe of potential buyers, especially in Asia and the Far East. Standard Chartered will work along with consultancy firm KPMG. Tata Steel appointed Bimlendra Jha as the CEO of its on-sale UK operations. Jha is the executive chairman of the company’s long-products bu- siness in Europe and will continue to hold the position until the sale to Greybull Capital is over.
“He (Jha) will be supported by a team with immense operating experience of the UK business,” said Tata Steel’s group ED Koushik Chatterjee. “To deliver greater clarity for all key stakeholders such as employees, customers and suppliers, it is important for the new team to seek all credible options in a time-bound manner,” he said.
The company said Jha will report to newly-appointed Tata Steel Europe CEO Hans Fischer. He will be supported by a team of executives drawn across functions.
Prior to assuming responsibilities for its long products business in Europe, Jha was ED, group strategy and European supply chain. He has been a member of Tata Steel Europe’s executive committee.
“After the sale of UK assets, TSE (Tata Steel Europe) will consist primarily of the highly efficient and moderately profitable facility in the Netherlands, leading to a sharp improvement in TSE’s margin and profitability, providing an improvement in credit profile in the long term,” said Sudarshan Shreenivas, director at India Ratings and Research.