Tata Steel is ready to strike a deal with a new buyer for its steel unit in Thailand. The company also received interest from several players to acquire its assets in Singapore. These two assets are being sold as part of Tata Steel’s plans to completely exit Southeast Asia.
“We must close the deal to sell our unit in Thailand in the near future. We have already signed a Memorandum of Understanding and, I hope, this transaction will be closed in the next month or two. Then we still have a Singapore branch, to which we have received interest from customers, ”said Tata Steel Executive Director T.V. Narendran Narendran does not disclose the names of potential buyers.
Terminated Sales Contract
In August, Tata Steel terminated the final agreement signed with the Chinese HBIS Group Co to partially sell its stake in Tata Steel (Thailand) Public Company and NatSteel Holdings Pte for 327 million dollars.
According to an agreement signed in January, HBIS was to acquire a 70 percent stake in both companies. But this transaction did not take place, because HBIS was not able to obtain the necessary permissions from the Hebei government (North China Province), which is one of the key conditions and precedents for the proposed transaction.
In a previous agreement, Tata Steel agreed to establish a joint venture with the Chinese government group HBIS. Now, the Indian steel mill plans to completely abandon two plants in Southeast Asia. The sale of assets aims to reduce debt in the amount of more than 1 million crores.
European assets
Tata Steel also planned to sell its assets in Europe, but in May the European Commission rejected the company's plan to merge its loss-making European operations with the German conglomerate Thyssenkrupp.
Not having received regulatory approval for the merger, Tata Steel decided to sell the competing business separately and close non-viable units.
Earlier this month, Tata Steel Europe ceased operations at its subsidiary Orb Electrical Steels in Newport, South Wales, and at the Wolverhampton Engineering Steels service center in the UK, resulting in the loss of 406 jobs.
The renewal of European operations began last May, when the company blocked five non-core enterprises. Two divisions were sold - Kalzip, a manufacturer of aluminum roofing and cladding, and Firsteel, a manufacturer of coated steel baking dishes. Both of these deals helped save 275 jobs.
One of the five non-core businesses was Cogent Electrical Steels, which includes Orb Electrical Steels, Cogent Power Inc in Burlington, Canada, and Surahammars Bruks AB in Surahammar, Sweden.
Selling Cogent Power
Earlier this month, she signed an agreement to sell Cogent Power, which manufactures cores for electrical distribution transformers and employs about 300 people, to the Japanese steel giant JFE Shoji Trade Corporation.
It was decided to keep the company Surahammars Bruks, which produces advanced steel for electric vehicles and employs about 100 people.
Narendran said that in Europe the company seeks to get positive cash income in order to reduce its dependence on India. “The challenge facing our team in Europe is that if you have a positive financial result, you are no longer dependent on India to receive any support - you are stable by yourself. We are closer to this than ever before. If the market were not so bad, we would have achieved this, but since the market is so bad, it may take longer, ”Narendran said.
