Due diligence for Netherlands business sale to complete in next 2 months: Tata Steel CFO Koushik Chatterjee

By: |
November 17, 2020 3:15 PM

The company has also initiated the process to separate Tata Steel Netherlands and Tata Steel UK and will pursue separate strategic paths for both the businesses in the future.

Tata Steel, Tata Steel's Netherlands operations, Swedish steelmaker SSAB, Tata Steel UK, downturn in steel demand, tata steel disinvestmentDue diligence process for the sale of the Tata Steel Netherlands operations has already begun. (File Photo)

The due diligence process for the sale of Tata Steel’s Netherlands operations will complete in the next two months, its Executive Director and CFO Koushik Chatterjee said on Tuesday. In Europe, Tata Steel is in talks with Swedish steelmaker SSAB on the potential sale of its Netherlands business, including Ijmuiden steelworks.

The company has also initiated the process to separate Tata Steel Netherlands and Tata Steel UK and will pursue separate strategic paths for both the businesses in the future. The due diligence process for the sale of the Netherlands operations has already begun. In COVID situation, it will be a bit slow but the company is geared up. Tata Steel is working with all stakeholders in the Netherlands, the supervisory board, the Board of Management etc, Chatterjee said.

“In two months time, we will complete the due diligence and be able to get into a stage where…we will be looking at the whole binding, structure of the offer, the valuations and everything else. As we complete with due diligence, then the process of getting the final commercials as well as the negotiations on the documentation etc will also happen. So, that’s broadly the timeline,” he said. Last week, the company said it has initiated discussions with SSAB on the potential sale of Tata Steel Netherlands business, including Ijmuiden steelworks.

The company had said that the downturn in steel demand due to the COVID-19 pandemic is expected to adversely impact the future business outlook of Tata Steel UK Limited (TSUK), a subsidiary of the company held through Tata Steel Europe Limited (TSE), with respect to its ability to continue as a going concern and meet its liquidity requirements.

“TSE, including TSUK, continues to implement various measures aimed at conserving cash, including but not limited to deferral of capital expenditures, cost reductions, use of non-recourse securitisation programmes, seeking Government-backed funding etc,” it had said. Tata Steel on Friday reported about 50 per cent decline in consolidated net profit to Rs 1,665.07 crore for the September 2020 quarter.

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