Tata Steel Sounds Out 190 En­ti­ties for UK Sale

Co sold its long prod­ucts busi­ness to Grey­bull Cap­i­tal last week for £1

The Economic Times - - Companies - Our Bureau

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.

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