Tata Steel Investing in Europe Business & Drops Plans to Divest
PTI reported that Tata Steel has outlaid a capital expenditure of INR 3,000 crore for its European operations as its focus is to make the business stronger. Tata Steel CEO & Managing Director Mr TV Narendran told PTI "For financial year 2022, we have guided that our capex will be INR 3,000 crore for Europe. It is more for sustenance capex, environment related capex, capex on the product mix, enhancement that we are doing particularly in the Netherlands.”
He said “In Europe, the company's operation is being separated into Tata Steel Netherlands and Tata Steel UK which would help in cost efficiencies and management focus. The European business this year will be cash positive in terms of EBIDTA and PAT. It will be a strong year for European businesses as well. Tata Steel's focus is on the performance of European business. We are not actively looking for any buyers. If you make the business stronger, that helps with the value of the business.”
He further said “It was SSAB which had reached out to Tata Steel. We had not gone looking for them. The only time when we were actively working on it was when the Thyssenkrupp proposal was there. SSAB was interested, they pursued then dropped it. Tata Steel is under no pressure to take any hasty action. The company will continue to focus on performance of the business.”
According to the company, steel deliveries at Tata Steel Europe increased by 17.4% YoY to 2.33 million tonne in the April-June quarter of the ongoing fiscal, and EBITDA improved sharply to 150 million pounds.
Earlier, the proposed merger of Tata Steel's European operations with Thyssenkrupp of Germany hit a roadblock after the European Commission raised many objections to the deal. Tata Steel Europe and Thyssenkrupp had signed definitive agreements in June 2018 to combine their steel businesses in Europe to create a 50-50 pan European joint venture company