Tata Steel gains on plans to divest UK steel business

The board plans to divest its loss making European steel business.

Shares of Tata Steel were up over 2% at Rs 311 on the Bombay Stock Exchange after the board of directors at its meeting held on Tuesday to review the performance of the loss making European business decided to explore all options for portfolio restructuring including potential divestment of Tata Steel UK in whole or in parts.

With muted demand for steel in Europe and structural factors including global oversupply of steel and sharp rise in third country exports into Europe in addition to high manufacturing costs having significantly impacted the long term competition of the UK operations, the company said in a release.

Meanwhile, analysts are positive on the company's plans to divest its loss making European steel business. (Click here for full report)

The company is also in talks with the UK Government to seek support for the best possible outcome for the UK business and discussions will also continue with Greybull in relation to a sale of the UK Long Products business, the release added.

The stock opened at Rs 309 and touched a high of Rs 313. At 12:30pm, over 4.3 million shares were traded on both the stock exchanges.