After the longing financial downfall and a test of tolerance levels of the executives, TATA Steel has been making rounds of news over the time.
It all gripped some momentum on April 11, when a formal scale process for its law making began and the company decided to appoint a banker. A crucial meeting between UK business secretary Sajid Javid and Tata Group Chairman Cyrus Mistry took place. The company hinted on selling the UK assets in parts if a buy could not be found for the whole business. The unions in the UK indeed opposed, worrying the quick and sudden job loss. The UK union then affirmed to not sell the assets hastily. Interestingly, a quite optimistic Javid tweeted later that evening: “Today I will be updating Parliament on govt action to help find a buyer for Tata Steel’s UK operations and secure viable future for UK.”
The British Prime Minister David Cameron himself took personal interest in trying to figure out a solution to this alarming problem. Further, a crisis cropped up due to the result of Chinese cheap imports, the receding global demand, high energy prices and a staunch tax policy than many competing economies.
Now, the Serious Fraud Office of the UK initiated investigations into Tata Steel operations. A very strong investigation began around Yorkshire’s site, suspecting the fakery of the certificates on the product composition before its sale. Biggies like Rolls Royce and BAE thus got affected.
The biggest steel producer in Britain, the Tata Steel, had to put up their assets for sale due to the extreme high costs. As said in the Economic Times, “weak demand and a flood of cheap supplies from the top producers China.”
The union’s assistant general secretary confirmed that Tata Steel work is indeed a national asset and also admitted that the community deserves a future. He further added, “But we all know for sure that Tata wants to sells and they have committed to proceed as a responsible seller.”
TATA Group Chairman, Cyrus Mistry
Finally, after some more meetings, Mistry announced in Mumbai, the sale process and promised to help find a serious buyer, thus securing the jobs of thousands of British workmen.
The secretary of the British Business, Sajid Javid, then publicly said on Thursday that the government was ready to purchase 25 percent equity stake with the steel tycoon.
Having being quite tolerant by now, Tata steels decided to hurry up with the process and announced that it could not continue to bleed anymore.
Blaming the high energy costs, the Tata Steel announced that it was the principle reason for the crisis. The company thus made it very clear that it did not wish to spilt its business by selling it to different buyers. The UK government, however, decided to focus on a much legitimate issue – the pension funds.
They announced buyers to inherit them which can show some very bad consequences for the taxpayers. The pension fund, variably, has more than 130,000 members and a deficit of 485 million pounds. The Steel tycoon finally put up the their esteemed company to sale.
Tata now launched the operation Pluto. The current situation included talking intensively and were in the process of short listing the buyers pertaining to this India’s steel giant, now a loss making unit in the United Kingdom.
They say that discussions are still taking place and that around June 25 – 26 Tata’s board is expected to meet in Mumbai which is now considered to be the last calling for any upcoming buyers to crack the deal.
Currently, the Tatas have assets in sites at Newport, where they have around 1,300 people employed and another at Rotherham, where 1,200 people are employed. Lastly, they have operations at Corby, Shotton and Teesside.
Tags: Tata Steel TATA Steel UK
