BENGALURU (Reuters) – India’s Tata Steel Ltd <TISC.NS> said on Monday it would shut parts of its non-core businesses in the United Kingdom, a move that could cost about 400 jobs.
The steelmaker proposed to close its loss-making Orb Electrical Steels site in South Wales, potentially affecting up to 380 jobs, as it was “unable to find a way forward” for the business, it said in a filing https://www.bseindia.com/xml-data/corpfiling/AttachLive/0a50d7de-01e7-4f84-8cde-8d9b0f874ce0.pdf to Indian stock exchanges.
Tata put up five of its non-core businesses in Europe on sale in May 2018 as it looked to focus on its strip products business.
Orb is part of one of these businesses, Cogent, which makes electrical steels.
“Continuing to fund substantial losses at Orb Electrical Steels is not sustainable at a time when the European steel industry is facing considerable challenges,” said Henrik Adam, chief executive officer of Tata Steel’s European operations.
The company saw no prospects of the business returning to profitability in the coming years, Adam said.
Tata Steel said it would cost the company more than 50 million pounds ($61.39 million) to upgrade the site to produce steel for electric vehicle production.
Unite, UK’s largest trade union, said in a statement https://unitetheunion.org/news-events/news/2019/september/unite-demands-tata-steel-assurances-over-closure-of-newport-site it has sought assurances that there would be no compulsory redundancies from Tata Steel after the steelmaker announced Orb’s closure.
Tata added it had signed a deal to sell Cogent Power, another division of Cogent, to Japan’s JFE Shoji Trade Corp.
It also plans to close another non-core business, Wolverhampton Engineering Steels Service Centre, as it did not find a buyer. This could cost up to 26 jobs, it said.
The news comes weeks after Turkey’s military pension fund OYAK reached a provisional agreement to take over British Steel, which Greybull Capital bought for one pound from Tata Steel three years ago, potentially saving thousands of jobs.
British Steel was put into compulsory liquidation on May 22 after Greybull Capital failed to secure funding to continue its operations.
(Reporting by Chris Thomas in Bengaluru; Editing by Subhranshu Sahu)