 "Tata Steel in talks with UK govt to keep Britain ops")
Tata Steel, India's largest steel producer, is said to be close to striking a deal with the UK government to retain the loss-making operations there, in turn securing the jobs of about 11,000 workers active at the plant.
The company is said to be in talks to secure loan worth £1 billion and restructure the British Pension Scheme after no potential bidder could guarantee keeping the plants running for more than three years, UK media reports said.
"Tata Steel needs to come clean whether it is in talks with the UK government or not. The company has been silent on this matter and we have been getting to know about a deal between the two (Tata Steel and UK government) only from outside," Harish Patel, national officer (metals & foundry) from Unite, Britain's largest trade union, told Business Standard. Workers of Tata Steel UK's operations are members of this trade union.
UK business secretary Sajid Javid is leading the UK government's efforts to rescue thousands of steel jobs in the country. He had earlier said the government was willing to offer hundreds of millions of pounds to a buyer of Tata Steel UK and restructure the pension scheme, which has liabilities of £15 billion and costs £100 million a year to support.
"Unite is concerned about its members as we think this is a roundabout way of Tata Steel to abdicate its responsibility on the British Pension Scheme, which is a heavy liability for the company," said Patel.
Early last month, Tata Steel had shortlisted seven bidders for its 5.5-million tonne British facility. Sajjan Jindal-led JSW Steel, Indian-origin businessman Sanjeev Gupta's Liberty House and London-based investment firm Greybull Capital were among those in the running.
Meanwhile, another source close to the development said that among the seven bidders, Tata Steel did not find a single entity to have the credentials to buy the facility.
"Also, when asked about Tata Steel's talks with the UK government to keep the plant, the company said it is market speculation," said the source.
Tata Steel's European operations have given it more pain than pleasure ever since its acquisition in 2007 for a hefty sum of $12 billion. At the time of acquisition, Tata Steel hogged the limelight of being among the top five steel producers in the world in line with ArcelorMittal - the world's largest steelmaking company. The phase was shortlived as hostile business climate following Lehman Brothers' bankruptcy in 2008 led to financial drain on Tata Steel as European operations made losses at operating level time and again, compelling the company to sell some of its units part-by-part.
Finally in March 2016, Tata Steel announced plans to sell its entire 10-million tonne capacity in the UK as a result of a global slump in steel prices. While it managed to get the 4.5-million-tonne long products division off its back as Greybull Capital bought it for a nominal amount recently, it is yet to find a buyer for the remaining 5.5-million tonne capacity.
The long products Europe business included Scunthorpe Steelworks, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities, as well as a rail mill in northern France, and will trade under the new name of British Steel. This business employs 4,800 people in all - 4,400 in the UK and 400 in France.
Calls to Tata Steel officials remained unanswered at the time of going to print.
