Tata Steel in Talks With Liberty to Sell U.K. Speciality AssetsBy
Indian firm seeks 100 million pounds for the British business
Tata working to make separate strip-product assets profitable
The pact covers the Rotherham electric arc steelworks, the Stocksbridge facility, a mill in Brinsworth and service centers in the U.K. and China, Tata Steel said in an exchange filing Monday. The speciality steel division employs about 1,700 people making steel for the aerospace, car and oil and gas industries.
The potential disposal is part of India’s most-indebted steelmaker’s plans to reduce debt by selling unprofitable assets. The company said in July it was in talks with firms including Thyssenkrupp AG for a possible joint venture for its European business, after earlier this year putting U.K. assets, including the Port Talbot plant in South Wales, up for sale.
Tata Steel is working on a plan to make its separate U.K. strip-products business profitable, it said in the statement.
“We continue to actively seek solutions to the company’s structural challenges and work with all stakeholders,” Bimlendra Jha, chief executive officer of Tata Steel U.K., said in the statement. “Among those challenges, there is the need to develop a more sustainable business in the U.K., as well as a self-sustaining future for the British Steel Pension Scheme.”
Liberty House, which earlier this year agreed to buy Tata Steel’s Clydebridge and Dalzell facilities in Scotland, has been purchasing distressed assets with a plan to improve them partly by cutting costs. Last week, its sister company SIMEC agreed to buy Rio Tinto Group’s U.K. aluminum business for $410 million, and Liberty House will operate the smelter.
Tata Steel has also completed the sale of its Scunthorpe steelworks in England, as well as mills in Teesside and France to Greybull Capital LLP.
Tata Steel shares fell 0.5 percent to close at 406.60 rupees in Mumbai. The stock gained 57 percent this year as the company increased production on anticipation that the Indian government will spend more on infrastructure, while the flood of cheap imports slowed.