Tata Steel in talks with SSAB to sell Dutch unit

Tata Steel is on the point of break up its European operations down the center because it begins talks with Scandinavian metal sheet producer SSAB Sweden to promote its worthwhile division within the Netherlands.

This leaves the UK operations, headquartered in Port Talbot in southern Wales, on the mercy of a UK authorities bailout. Tata Steel acquired each items when it purchased out Anglo-Dutch metal Corus Group Plc in 2006 and has spent the following decade and half dealing with slowing metal demand in Europe demand, rising value of operations and pension settlements with labour unions.

“The company has initiated discussions with SSAB Sweden based on interest received for the potential acquisition of Tata Steel’s Netherland business including Ijmuiden steelworks,” Tata Steel mentioned in a press launch. “The company has also commenced discussions with the supervisory board and board of management of Tata Steel Netherlands and the process will move to the next stage including due diligence and stakeholders’ consultations.

The company is committed to deploy proceeds of any strategic restructuring towards additional deleveraging of the balance sheet, it said.

“The company has also initiated the process to separate Tata Steel Netherlands and Tata Steel UK and will pursue separate strategic paths for the Netherlands and UK business in the future,” it added. “Tata Steel continues its dialogue with the UK government on potential measures to safeguard the long-term future of Tata Steel UK and is also reviewing all options to make the business self-sustaining without the need for any funding support from Tata Steel India in the future.”

SSAB Sweden additionally confirmed on Friday that it’s fascinated with buying the IJmuiden metal mill and associated downstream belongings. Separately, European media has reported that SSAB Sweden can also be in discussions to accumulate Germany’s thyssenkrupp’s metal enterprise, the second-biggest metal enterprise in Europe by gross sales. A merger between Tata Steel Europe and thyssenkrupp had been blocked by the European Commission final 12 months.

Tata Steel, the nation’s largest non-public sector steelmaker, can also be simplifying its company construction again in India.

The firm mentioned it’s folding listed and unlisted subsidiaries into 4 clusters – lengthy merchandise, downstream, mining and utilities and infrastructure.

Towards this finish, Tata Metaliks and Indian Steel and Wire Products shall be merged into Tata Steel Long merchandise, a course of that may take 6-9 months to conclude.

Tata Steel stunned inventory markets on Friday when it reported a consolidated web revenue of Rs 1635 crore within the September quarter, in comparison with Bloomberg analysts’ estimates of Rs 29.21 crore. Consolidated income stood at Rs 37,154 crore for the quarter, rising 7.44% from the Rs 34,579 crore it reported within the year-ago interval.

The firm produced 6.73 million tonnes of metal within the September quarter, bouncing again to just about 100% capability utilisation within the three-month interval after covid-related lockdowns affected operations each in India and overseas within the April-June interval.

Consolidated Ebitda (earnings earlier than curiosity, tax, depreciation and amortisation) surged 60% year-on-year to Rs 6,217 crore whereas Ebitda/tonne rose practically 41% to Rs 8396 crore, in comparison with Rs 5963 crore within the year-ago quarter.

The firm mentioned its deleveraging plans are on observe because it decreased web debt by $1 billion within the first half of the fiscal.

“Tata Steel has delivered strong results in India with broad-based, market-leading volume growth and strong cashflow generation. There has also been a significant improvement in product mix towards domestic sales and higher value-added products and a sharp reduction in costs,” TV Narendran, CEO and Managing Director, mentioned.

“In Europe, though the overall environment remains challenging and recovery is more gradual, there has been an improvement in volumes and sales mix. We are continuing our discussions with the UK Government regarding the future strategy of our UK business”