Tata Steel: European consolidation strategy is on

Tata Steel on Friday said that it was continuing to pursue

European consolidation strategy and was in talks with
Thyssenkrupp AG for potential joint venture (JV) for
European steel business, following alleged disclosure from
ousted chairman Cyrus Mistry that some group companies
could face a potential writedown of 18 billion dollars.
Tata Steel said in a BSE filing that in response to the recent
media reports, the company continues to pursue its European
consolidation strategy and the talks with Thyssenkrupp AG
th
(as announced on 8 July, 2016) for a potential JV - joint venture of its European steel
business are presently ongoing and progressing.
It added that there could be however no guarantee that these talks would culminate in a
definitive agreement between the parties. The firm put it on record that Tata Steel UK was
also deeply engaged with all relevant stakeholders in the United Kingdom to find a
structural solution and a way forward in regards to the affordability of the legacy pension
scheme liabilities.
Tata Steel said that it was pursuing a completely separate process for the potential sale of
the South Yorkshire-based Specialty Steels business in UK. It also clarified that any
further announcement on the issue would be made at an appropriate time.
Meanwhile, the management team and the employees of Tata Steel continue to work on
enhancing and improving the underlying performance of the European business amidst
challenging business conditions, the company added. These comments from the firm come
against the backdrop of the high-profile Tata-Mistry case or Tata-Mistry divorce to put
it rhetorically.
In an explosive letter to Tata Sons board members, Mistry leveled a series of allegations
against Ratan Tata and challenged that he was pushed into a position of a lame duck
chairman and changes in the decision-making process gave birth to alternative power
centres in the massive Tata group. Cyrus Mistry warned that the salt-to-software
conglomerate might face writedowns due to 5 unprofitable businesses he had inherited.
Cyrus Mistry further said that he had inherited a debt-laden enterprise saddled with losses
and went on further to single out Indian Hotels, passenger-vehicle operations of Tata

Motors, European operations of Tata Steel, part of the groups power unit and its
telecommunications ancillary as legacy hotspots.
The Tata-Mistry case has had a negative impact on the Tata stocks. However, Tata Steel
share price has shown signs of recovery. The stock closed at Rs.405.45, over 2 per cent up
on the National Stock Exchange (NSE).

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Article Written by
Salman Hashmi