The Labour government in the UK has cleared the decks for a 500 million grant to Tata Steel, paving the way for decarbonisation of the company's British business and a sustainable financial future. In a statement, Tata Steel said that it has signed a 500 million Grant Funding Agreement (GFA) with the UK government, allowing it to "proceed at pace with the project to install a state-of-the-art electric arc furnace (EAF) at the Port Talbot steelworks in Wales". This is part of the 1.25 billion green steel project in Port Talbot, of which Tata Steel's investment is to the tune of 750 million.
More than 2,800 jobs will be axed as Tata Steel plans to close its blast furnaces at the Port Talbot plant in South Wales in the UK. Of the total job cuts, 2,500 will be in the next 18 months, said Indian conglomerate Tata. A further 300 jobs are to go in three years.
There is positive sentiment for Tata Steel on the basis of strong domestic demand, a turnaround of European operations and moderate valuations. A combination of capacity expansion, efficiency gains, higher asset utilisation, and improved operating leverage may lead to margin expansions.
UK's largest union Unite warned Tata against ducking its promises and conducting a 'fire sale' of its specialty steel business
Tata Steel's consolidated net profit more than doubled to Rs 2,007.36 crore during the June quarter, on account of "increase in net steel realisations and the planned cost-takeouts" across geographies. The Tata Group entity had posted a net profit of Rs 918.57 crore in the year-ago period.
Tata Steel's UK operations, which have largely been a struggle since the acquisition, are expected to turn earnings before interest, tax, depreciation, and amortisation (Ebitda)-positive this financial year (2025-26/FY26) and possibly profitable by the next. Responding to shareholder queries at Tata Steel's annual general meeting, Tata group chairman N Chandrasekaran said, "We expect the UK to perform much better this year compared to last year - it will definitely be Ebitda-positive."
'The UK is more of a structural problem, and that's why we're doing the restructuring.'
It was August 2007. Tata Steel was turning 100. Jamshedpur, its hometown, had an air of celebration. The line-up for the special event included the launch of Air Deccan's commercial flight connecting Kolkata and Jamshedpur, and release of Russi Lala's new book, Romance of Tata Steel. There was also the screening of The Spirit of Steel, a 20-minute documentary directed by Zafar Hai showcasing Tata Steel's legacy, and a corporate anthem penned by Javed Akhtar and composed by Shankar, Ehsaan and Loy.
The United Kingdom on Friday announced a joint investment package with Tata Steel worth 1.25 billion pounds, including a government grant of 500 million pounds, for the country's largest steelworks in Wales that will help protect thousands of jobs and boost the British economy. The government's grant has been dubbed as one of the largest British government support packages in history and a "defining moment" for the country's steel industry.
There has been no change in Tata Steel's strategy on operations in the United Kingdom (UK), company chairman N Chandrasekaran has told shareholders. The statement comes amid growing concern about the restructuring plan in the face of change in government in the UK. Tata Steel's plan for the UK entailed a 1.25 billion investment plan agreed upon by the Conservative party-led government in September last year.
Tata Steel has a very British problem. The performance of Europe dragged the steel major's October-December (Q3FY23) performance with the UK business accounting for a major part of the operating loss; on the bottom line, the overhang of the British Steel Pension Scheme (BSPS) showed. And a nearly three-year discussion with the UK government on a support package for a green transition resulted in an offer that fell short of the ask.
Banksy fans are flocking to the Welsh town of Port Talbot to see a new mural by the elusive British street artist depicting a child covered in snow that is in fact ash from a burning bin. Now metal barriers and traffic wardens have been brought in to manage crowds around the new Bansky artwork that was painted on a Welsh garage.
Tata Steel UK is reformatting its operations in Port Talbot by investing 1.25 billion in an electric arc furnace facility with the UK government contributing 500 million. The project will take around three years to complete, if all the regulatory clearances come through. The facility will use scrap and be classified as green since it will utilise renewable power and cut carbon emissions considerably.
There was an acceptable domestic performance in India but there continues to be concerns about the Europe business and that overshadows the local performance. The consolidated revenues for the Q2FY24 stood at Rs 55,682 crore with an operating profit of Rs 4,315 crore and an operating profit margin of 8 per cent.
'As Tata Steel we will obviously use group-level leverage to make progress where we want.'
Tatas plan to revive, not sell the Port Talbot steel plant. The investment could be as much as $500 million.
Tata Steel-owned Corus on Tuesday said it will invest 185 million pound (Rs 1,355 crore) in the No 4 blast furnance at Port Talbot steelworks in Wales, that will increase capacity by 400,000 tonnes a year.
Tata said last week it was "committed to seeking all credible options in an urgent manner"
Gupta has expressed an intent to buy Port Talbot, Britain's biggest steelworks
'It's an open secret that the UK business is structurally not in a great place.'
There are seven potential buyers, ranging from the Port Talbot steelworks' management to the UK steel industry investors Liberty House
The British government has been under pressure to help a sale process go through after Tata said it would sell its British business.
It is not clear at this stage whether Tata will take up the government's offer of taking a 25 per cent stake in the business.
European Union steel prices hit their lowest since 2004
Anglo-Dutch steel company Corus, currently in the midst of a takeover bid by India's Tata Steel and Brazil's CSN, has been fined more than three million pounds for breaching health and safety laws at a factory where an explosion killed three workers
Britain's traditionally anti-EU media have blamed Brussels for preventing London from taking greater steps to protect the industry.
The Tata Group had acquired its UK steel operations as part of a 6.7 billion pounds acquisition from Anglo-Dutch steelmaker Corus in 2009.
JSW will pay at least Rs 4,000 crore Rs 40 billlion.
In March, Tata Steel announced its intention to sell the entire 10.5 million-tonne UK assets.
But there are fears that any reform could be reduced to tweaking because the tax is so lucrative.
Besides a minority stake, the UK and Welsh governments are considering additional grant funding
Sanjeev Gupta, chief of Liberty House, is being dubbed UK's new 'man of steel' after he emerged as a potential saviour of 4,000 jobs
Cyrus Mistry had put in place a strategy that would have pulled most of the Tata group's 'legacy hotspots' out of the financial mess from legacy issues and helped turn around the group's finances.
The struggling steelmaker said the sale includes several South Yorkshire-based assets, including electric arc steelworks and bar mill at Rotherham, steel-purifying facility in Stocksbridge and a mill in Brinsworth.
The company said it had extended financial support to the UK business.
The UK government has promised to put in place measures worth hundreds of millions of pounds to support any rescue deal for the Indian group's UK business.
Pharma shares were the top gainers led by Lupin after the company received EIR from USFDA for its Goa facility
The S&P BSE Sensex ended down 371 points at 24,966 and the Nifty50 closed 101 points lower at 7,615.
Analysts sceptical whether company will sustain rise in operating profits.
Some feel that Tata Steel has put these assets on the block only after exhausting all the options.
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