Tata Steel Europe Puts Five Business Units Up For Sale

SEATTLE (Scrap Monster): Tata Steel Europe has announced its decision to sell five non-core business units, as part of its strategy to focus on core strip products business and strategic markets. Tata Steel had earlier sold other non-core businesses such as Long Products Europe and Specialty Steels.

The proposal includes Cogent, U.K.-based manufacturer and processor of electrical steels; Kalzip, Germany-based aluminum roofing and cladding business; Firsteel, UK, processor of coating kitchenware; Tata Steel Istanbul Metals, Turkey-based steel coil coating company and Engineering Steels Service Centre, U.K.-based processor of engineering steels.

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According to statement issued by the company, it has already commenced the process of seeking buyers for the above business units. In a recent effort to trim its exposure in European region, the company had conducted a detailed review of all its businesses in the region, which in turn led to the identification of the above potential non-core businesses for sale. Further, the statement noted that the customer bases for the businesses being put for sale are entirely distinct from the rest of Tata Steel Europe. Hence, it is very much essential to find best owner for each of these business units.

The steelworkers’ trade union responded to Tata Steel’s decision saying that it is likely to bring yet another period of uncertainty to hundreds of steelworkers across the UK. During discussions with the company with regards to merger with Thyssenkrupp, the Tata Steel management had committed that there would not be any more asset closures.

Meantime, Tata Steel’s merger talk with Thyssenkrupp is in the final stages. This would create the second largest steel producer after ArcelorMittal. It must be noted that ArcelorMittal’s acquisition of Italian Ilva has already made it the largest producer on the continent.

As per estimates, Tata Steel Europe has a debt of around €3 billion. The sale of the above five non-core assets will help the company to bring down its debt.