Speaking at the company’s 113th annual general meeting, Chandrasekaran said, “Tata Steel UK is not profitable and continues to be a drag, so we are in talks wi-th the UK government.The talks are not over yet and that is all that I can tell you at this point,”.
Tata Steel continues to be in discussions with the UK government for its operations in the country and is hopeful of a solution this financial year, N Chandrasekaran, chairman, Tata Steel, said on Thursday. Speaking at the company’s 113th annual general meeting, Chandrasekaran said, “Tata Steel UK is not profitable and continues to be a drag, so we are in talks wi-th the UK government.The talks are not over yet and that is all that I can tell you at this point,”.
He added, “If we have a successful outcome it is good, but if we do not have a successful outcome then we are also thinking through our alternative options. The intent is to find a solution which is lasting.” Tata Sons is reported to be seeking £900 million from the UK government’s Project Birch fund, which was set up to provide state support for strategically important businesses hit by Covid-19.
The chairman said he would like the company’s debt to be brought down to Rs 75,000 crore , adding the target ratio for the net debt to Ebida was three times or lower. “It will be done through sale of non-core assets as well as through cash flows,” he explained. Chandrasekaran said discussions for the sale of the south-east Asia businesses were on. Tata Steel’s capex for FY21 will be in the range of Rs 4,000-Rs 4,500 crore versus a capex of around Rs 9,000 crore in FY20.
Chandrasekaran said the auditors concerns about the going concern status of Tata Steel Europe did not amount to a qualification. “This is a comment that has been made by the auditors. Today audit norms are such that they need to evaluate and they have to make these comments and Tata Sons and Tata Steel are committed to ensuring that we do what is right,” he said. He added that the company has been actively engaged in Tata Steel Europe “to find a sustainable, structural solution”.
Chandrasekaran said Tata Steel is on track on simpify company’s structure pointing out, that in Europe, the number of subsidiaries is down to 151 from over 300. In India, the company is well on its course to reorganise subsidiaries into four segments. The merger of Tata Steel BSL with Tata Steel will happen in 2020-2021, the chairman said consolidating the three large manufacturing hubs at Jamshedpur, Kalinganagar and Dhenkanal in a single entity.