Tata Steel puts UK biz on block; Govt, unions hunt for options

Tata Steel has put its entire UK business on the block, putting thousands of jobs at risk amid a deepening crisis in the country's once-storied sector that the Indian conglomerate had entered nearly a decade ago with a USD 14-billion takeover with much fanfare.
Jolted by the decision, announced in week hours today by Tata Steel after a marathon board meeting at its Mumbai headquarters, the unions have given a call for nationalisation while the government authorities have assured nearly 17,000 workers at the company plants across the UK that all possible options would be explored to safeguard their interest.

Tata Steel, one of the flagships of the over USD 100-billion Indian conglomerate Tata Group, said it has decided to "explore all options for for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts" amid a "deteriorating financial performance of the UK subsidiary in the last 12 months".
Tatas had entered the British steel sector, which once dominated the British economy, in early 2007 with acquisition of Anglo-Dutch steelmaker Corus after a fiercely fought takeover battle -- which till date remains the biggest ever overseas acquisition by an Indian group.
Tata Steel had emerged the winner after a months-long takeover battle with Brazilian rival CSN that ended with a regulator-conducted auction running into nine rounds.

The decision was taken by Tata Steel, which employs nearly 17,000 people across UK, after intense deliberations till late night yesterday, including with the members of British trade unions.

Tatas have struggled hard to turn around Corus, which it renamed as Tata Steel Europe in 2010 and analysts feel it could be really difficult to find a buyer. They attributed the decision for sale of the business to the huge loans taken for Corus acquisition, as also to the tough environment being faced by steel firms in Europe, particularly in the UK.
In a joint statement, the UK and Welsh Governments said: "This is a difficult time for workers in Port Talbot and across the UK. During the review process, we remain committed to working with Tata and the unions on a long term sustainable future for British steel making.

"Both the Welsh and UK governments are working tirelessly to look at all viable options to keep a strong British steel industry at the heart of our manufacturing base."
Trade unions called on the government to take urgent action to save the crisis-ridden steel industry.
UK's largest trade union Unite said: "The growing chorus of calls for re-nationalisation cannot be ignored by the Conservative government."
Corus came into the being in 1999 after the merger with with Koninklijke Hoogovens of the erstwhile British Steel Plc, which was known as British Steel Corporation before being privatised in 1988.