A good name

26 April 2016 By Una Galani Follow @ugalani

Lenders long assumed the unlisted Indian group would ride to the rescue of subsidiaries. Troubles at its European steel unit, which owes $6 bln, are testing that faith. If Tata forces banks to share its pain, other group companies may have to pay more for their $11 bln of debt.

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Britain could part-nationalize Tata Steel’s UK plants as part of a support package worth hundreds of millions of pounds, the country’s Business Ministry said on April 21, adding that the government could take a stake of up to 25 percent in the business.

Separately, senior staff at Port Talbot, Britain’s biggest steel works, are seeking to launch a management buyout plan with the support of staff, investors and the government.

Tata Steel has set a deadline of May 28 to close down its UK arm if it is unable to negotiate a viable sale, the Financial Times reported on April 13 citing people familiar with the situation.

The newspaper added that sources said the new deadline could slip into mid-June as a “goodwill gesture”.

On April 11, Tata agreed to sell its long products business in Europe to Greybull Capital for a nominal sum. The business, which employs 4,800 people in the United Kingdom and 400 in France, was sold debt-free.

Tata said on April 9 that it is cooperating with the UK Serious Fraud Office after it opened a criminal investigation into the group relating to inappropriate testing and certification procedures at its South Yorkshire-based specialty steels business.

Tata Steel has appointed KPMG and law firm Slaughter and May to advise on the sale process.

Context News

Separately, senior staff at Port Talbot, Britain’s biggest steel works, are seeking to launch a management buyout plan with the support of staff, investors and the government.

Tata Steel has set a deadline of May 28 to close down its UK arm if it is unable to negotiate a viable sale, the Financial Times reported on April 13 citing people familiar with the situation.

The newspaper added that sources said the new deadline could slip into mid-June as a “goodwill gesture”.

Tata Steel has appointed KPMG and law firm Slaughter and May to advise on the sale process.

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