{"id":133841,"date":"2023-08-04T06:38:56","date_gmt":"2023-08-04T06:38:56","guid":{"rendered":"https:\/\/fin2me.com\/?p=133841"},"modified":"2023-08-04T06:38:56","modified_gmt":"2023-08-04T06:38:56","slug":"pace-of-engagement-with-uk-has-picked-up","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/pace-of-engagement-with-uk-has-picked-up\/","title":{"rendered":"‘Pace of engagement with UK has picked up’"},"content":{"rendered":"
‘As Tata Steel we will obviously use group-level leverage to make progress where we want.’<\/strong><\/p>\n Tata Steel’s protracted discussions with the UK government on financial support for transition to greener steel appear to be finally moving in the positive direction with both sides working towards a solution.<\/p>\n In a video interview, T V Narendran<\/strong>, managing director and chief executive officer, tells Ishita Ayan Dutt<\/strong>\/Business Standard<\/em> that collectively the group is one of the big investors and employers in the UK and Tata Steel would use group-level leverage to make progress where required.<\/p>\n Europe dragged Tata Steel’s performance in the last three quarters on a consolidated level. When is it likely to turn the corner?<\/strong><\/p>\n The issue we have had the last two-three quarters is largely with the Netherlands, which has always been Ebitda- and PAT-positive (Ebitda is earnings before interest, tax, depreciation and amortisation and PAT is profit after tax).<\/p>\n The UK has been swinging from positive to negative Ebitda.<\/p>\n But the second half of the year is when you will see recovery, more specifically from November.<\/p>\n One blast furnace that has been down for relining in the Netherlands should start in Q3.<\/p>\n The cost of energy and electricity in Europe is coming down and will fall more rapidly in Q3 and Q4.<\/p>\n And if steel prices start going up, then you will see a quicker recovery in European performance.<\/p>\n But steel prices have started moving up?<\/strong><\/p>\n In flat products, across the world, the view is that we have reached the bottom.<\/p>\n In Southeast Asia, prices have gone up by $20-30 a tonne and offers have started creeping up in Europe.<\/p>\n In India, there are attempts to push up prices, but we are still waiting for some traction. So, prices seem to have bottomed out.<\/p>\n Is there any breakthrough in your discussions with the UK government on financial support?<\/strong><\/p>\n I think we are making good progress — the frequency of meetings has increased and the conversations are deeper. We have engagement at the highest level.<\/p>\n In many ways, there is a greater willingness and commitment to find a solution quickly.<\/p>\n We are hoping that in the next couple of months we will be at a stage where we can at least announce some sort of framework on this.<\/p>\n The depth and pace of engagement have picked up very significantly.<\/p>\n Is there a possibility that you will get more than the 300 million pounds offered by the government?<\/strong><\/p>\n That’s the hope and expectation. We have already said that at 300 million pounds, it doesn’t work.<\/p>\n We are also looking at our own proposal to see if we can do better than what we had proposed. The idea is to find common ground.<\/p>\n Is there a timeline for finalising this?<\/strong><\/p>\n The larger timeline is that some assets are coming to their life’s end.<\/p>\n Clearly in the next year, we have to take a call one way or the other.<\/p>\n These results (financial<\/em>) highlight that we are bleeding.<\/p>\n And we cannot continue bleeding for a long time. These are two aspects that are there as pressure points.<\/p>\n The government is also keen that this is a subject that needs closure sooner rather than later.<\/p>\n Discussions with the UK government were at group level for multiple projects. Has Tata Sons’ announcement on the battery plant in the UK helped fast-track your discussions?<\/strong><\/p>\n The Tata group has a huge stake in the UK because multiple businesses — Jaguar Land Rover, Tata Steel, TCS, Tata Consumer Products, and Tata Chemicals — are all there.<\/p>\n We are one of the big investors and big employers in the UK, collectively.<\/p>\n So there is a group-level relationship. As Tata Steel we will obviously use that group-level leverage to make progress where we want.<\/p>\n And I think there is acceptance of that on both sides.<\/p>\n Feature Presentation: Aslam Hunani\/Rediff.com<\/em><\/strong><\/p>\n