Tata Steel to Sell UK Spe­cial­ity Busi­ness to Lib­erty House

Deal, which cov­ers sev­eral South York­shire-based as­sets, is part of co’s move to re­cast Euro­pean ops

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau 1,700

Mum­bai: Tata Steel on Thurs­day signed a de­fin­i­tive agree­ment to sell its UK sub­sidiary’s spe­cial­ity steel busi­ness to the Lib­erty House Group for £100 mil­lion (`839 crore), the com­pany said in a reg­u­la­tory fil­ing on BSE on Thurs­day.

Tata Steel said the deal cov­ers sev­eral South York­shire-based as­sets, in­clud­ing elec­tric arc steel­works and bar mill at Rother­ham, steel pu­ri­fy­ing fa­cil­ity in Stock­bridge, a mill in Brinsworth as well as ser­vice cen­tres in Bolton and Wed­nes­bury in the UK and in Suzhou and Xi’an in China.

Spe­cial­ity Steels di­rectly em­ploys about 1,700 peo­ple, mak­ing steel for aero­space, au­to­mo­tive, and oil and gas busi­nesses. Tata and Lib­erty House had en­tered into ex­clu­sive talks in Novem­ber as the steel­maker seeks to off­load its money-los­ing as­sets and re­struc­ture Euro­pean op­er­a­tions. UK-based Lib­erty House is owned by In­dian-ori­gin busi­ness­man San­jeev Gupta, whose strat­egy is to re­cy­cle steel in­stead of mak­ing it fresh from blast fur­naces. The spe­cial­ity busi­ness can pro­duce 1 mil­lion tonne steel from elec­tric arc fur­naces, which can be used in the au­to­mo­bile and aero­space in­dus­tries.

Tata Steel said it is cur­rently con­sult­ing with its em­ploy­ees on a num­ber of pro­pos­als that would struc­turally re­duce risks and help se­cure a more sus­tai- nable fu­ture for its wider UK busi­ness. The com­pany is also in talks with the Bri­tish Steel Pen­sion Scheme trustee and the pen­sion reg­u­la­tor to de­velop a struc­tural so­lu­tion for its UK pen­sion scheme.

For­mer Tata Sons chair­man Cyrus Mistry had de­cided to exit the UK steel busi­ness to cut losses. The com­pany has in­vested £1.5 bil­lion in its UK busi­ness since the ac­qui­si­tion of Corus in 2007. How­ever, the new man­age­ment has de­cided to in­vest £1 bil­lion more over 10 years in the core steel­mak­ing fa­cil­ity in Port Tal­bot, which was ear­lier up for sale.

UK-based Lib­erty House is owned by In­dian-ori­gin busi­ness­man San­jeev Gupta

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