Unable to support loss-making unit anymore: Company

MUMBAI: The decision to put its UK business up for sale “was not a valuation exercise” and was taken after a decision of the board of directors that the company cannot continue to support the lossmaking unit, Koushik Chatterjee, group executive director, finance and corporate, Tata Steel, said at a press conference on Wednesday.

“The Board of Tata Steel after spending almost seven hours reviewing the European business, unfortunately came to a conclusion that going forward the Tata Steel UK business is not something the Tata Steel board can continue to support and therefore advised Tata Steel (the holding company for European business) to review all options that can be developed, including sale of business in whole or in parts,” Chatterjee said.

On whether the company regrets its decision to enter the UK, Chatterjee said it was a “logical derisking undertaken to spread across geographies, and that no company predicted the global financial crisis, which led to a 30% reduction in structural demand across Europe.”

Since its takeover of Corus in 2007, Tata Steel has invested about `19,100 crore in its UK operations. It has taken an asset-impairment charge of `19,200 crore in the last five years due to the poor performance of the business.

“We will look to work with the government, Union and other stakeholders,” Chatterjee added. HTC