Several parties interested in Tata Steel's UK-based unit-union
Resource from: reuters Likes:178
Nov 30,2015
Several parties are interested in a Britain-based Tata Steel unit that makes construction products as the steelmaker cuts costs and restructures its business amid a surge in Chinese exports to its markets, a union said.
"We're being told there's interest from several different parties but there are no bids on the table," said Paul McBean of the union Community.
McBean is also chairman of the Scunthorpe works multi-union committee, which represents several unions based at Tata Steel's plant in north-east England.
Tata Steel said last month it would cut 900 jobs at its Scunthorpe plant. The plant employs some 4,000 people and forms the base of the long products unit, which has some 6,500 people on its payroll across Europe.
Europe's second-largest steelmaker has been trying to sell the unit since last year, with increasing urgency as a global steel crisis intensifies, and with prices at decade lows.
A Tata Steel spokesman declined to comment on the sale talks, saying only that the company is "still assessing all strategic options" for the unit.
Tata Steel Europe chief executive Karl Koehler said earlier this month that the unit has no future within the company beyond the end of the current financial year.
The comments reinforced speculation that the company plans to wind down the unit if a buyer is not found.
McBean said he was not aware of the terms being discussed with the interested parties, but added they were probably on a par to the terms offered to Swiss-based commodities producer and trader Klesch Group earlier this year.
“Tata were offering Klesch the business for free and without any debt,” he said.
Klesch Group publicly withdrew its interest in the Tata Steel unit - which makes 'long' products used in construction, railways, shipbuilding and engineering - in August this year, laying the blame on the British government.
Britain has been severely hit by a global steel sector crisis that is fast rising up the political agenda in Europe, where many steelmakers lay much of the blame for their predicament on Chinese 'dumping' - selling products at below fair value.
Nearly 4,000 UK steel jobs were lost in October alone - equivalent to about one fifth of the sector's workforce.
Tata Steel has been forced to slash costs and cut thousands of jobs since 2007 when it bought Anglo-Dutch producer Corus for $13 billion. In 2013 it booked a writedown of $1.6 billion, largely related to its European business.
(reuters)
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