Search on
News Title
News Details
Reports/Directory
Glossary
Title_head
Top Scunthorpe employer TATA dismisses claims of steelworks sell-off
1053 times viewed.
Monday, 04 Mar 2013
EmailButton
Pdf_button
coming-soon

This is Scunthorpe reported that TATA Steel has dismissed as speculation a report said that the European arm that runs the Scunthorpe steelworks is unprofitable and should be sold off.

A report compiled by Asian brokerage firm CLSA said that Tata Steel Ltd may look at selling the European arm to boost its share price. It said that it senses TATA is looking at getting rid of assets that are not making enough money.

But a spokesman for TATA Steel said that "The author of the report called it a theoretical exercise. There was no input from TATA Steel."

The CLSA report said that "We sense a change in Tata Steel's thought process in recent months and there is now a much stronger focus on asset sales than in the past."

The brokerage firm with its clients' interests in mind said that selling the European arm of what was Corus could rid the portfolio of assets with a questionable outlook.

The broker has not revealed what its information is based on. But it concedes there are no moves afoot at the moment to sell TATA Steel Europe.

The report added that "While it is difficult to predict the likelihood and timing of such a sale the sheer possibility of this happening might provide a higher support to the stock price than otherwise in 2013."

However TATA Steel Ltd's share price dropped to a 1 year low in Indian markets after the report was released.

Steel analyst Mr Peter Fish managing director of Sheffield based MEMXN said that if the report was correct it suggested shareholder value was being put above long term planning.

He said that "It looks as if they had a grand plan when they bought it to put themselves into the position of being a big company but also well qualified to supply industries like the automobile and energy sector. I thought they were positioning themselves in that place but in this document it seems they might be preparing to abandon that strategy in favor of shareholder value. It's the difference between a long term concept and a short term one. It's a balance sheet building exercise."

However he conceded there might be other factors at work in the release of the report. He said that "They might have clients with shares in Tata who are not doing very well.”

Source - www.thisisscunthorpe.com

(www.steelguru.com)

This is alternative content.

Arcelor
More Global News