Reportedly, Tata Sons is considering divesting its UK steel business amid little hope from the UK government’s proposed £1.5 billion subsidy package for a transition to green energy. However, a company spokesman said Tata Steel was actively engaging with the UK government for financial support for its business there.
“Obviously plans are being made if we don’t get the support we are looking for from the (British) government, but it is too early to talk about that but again a lot of conversations are going on internally about how we plan for all situations,” Narendran said in a conference call. today in response to a question about the company’s plans if the UK government does not accept Tata Steel’s proposal.
Homegrown steelmaker Tata Steel has the UK’s largest steelworks in South Wales and employs around 8,000 people across operations in the country. Tata Sons said it needs funds to replace carbon-intensive blast furnaces with electric arc furnaces over the next few years to keep the plant operational. Tata Sons doesn’t see much point in waiting endlessly for help from the UK government, which is “sitting on the fence” and various exit options are being looked at, a person familiar with the matter said earlier.
The Tata Group, which has had a significant business presence in the UK for several years, has been vocal about the need for government support to survive.
Asked today whether a decision to engage with the buyer would be taken after the government’s response, Narendran said “of course, whatever we do we will decide based on the UK government’s response.”
Tata Steel today reported its consolidated net profit for the quarter ending September dived 87% year-on-year (YoY) to Rs 1,514 crore and well below ET Now’s poll of Rs 2,932 crore. The sharp decline in net profit was due to higher costs and weak operating performance. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) slumped 62% on year to Rs 6,060.4 crore.
Consolidated revenue fell by around 1% to Rs 59,877.5 crore. However, the topline is higher than the ET Now poll of Rs 54,298 crore.
(With PTI inputs)