Tata Steel, India's largest steel making company, on Wednesday said it would sell its UK assets. In a press meet, Koushik Chatterjee, the company's group executive director (finance and corporate), talks about its plan to find a new owner for the unit and factors that led to the current situation. Edited excerpts
On expectations from UK-government: We are in talks with the UK government. We have been having open, transparent engagement for the past several months. Being the largest manufacturing company, we have always kept them informed of the ground realities. Lately, we have engaged with them on a very intense basis, meeting them almost every week for the past eight weeks. We have been working together to find the most achievable objective under the circumstances and we'll continue to do so. No solution will come overnight. We'll have to consider newer options and any option will be considered to maintain jobs and keep the business going.
On regrets for decision made in 2007: The business strategy is based on the long-term perspective. Then, we were based in an environment where demand conditions were robust in developed countries and the challenges were high when it came to putting up capacities or expanding domestically. No company in any sector had predicted the global financial crisis. Structural demand in Europe went down 30 per cent after 2008. Such changes led to the complete repositioning of the sector. So, it's unfair to say the decision made was incorrect. What happened was what happened to Tata Steel UK and not what happened within Tata Steel UK - and this is an important distinction to make. There were factors that the company could not control.
On finding a new owner: We have an open mind and if divestment is an option, we need to look at it. It is difficult to give a timeline as to by when will we find the buyer as the decision has been taken just few hours back. Our endeavour will be to continue to operate till we find a buyer, but at the same time, given the cash drain we have from this unit, it's important to make this process a time-bound one.
On UK-asset debt burden, earnings: There's no specific debt on the UK business apart from the small working capital churn. The total long-term debt is about €3 billion on the entire UK business. The assets are already impaired in the UK and so the book value is zero to nominal. The units have been Ebitda (earnings before interest, taxes, depreciation and amortisation) negative over the past few quarters. The call to sell the asset has been taken to reduce our exposure and not a valuation exercise. We are looking to contain the risk by sale of this asset.