BackTata Steel’s pension deal in Europe seen more in favour of workers
Tata Steel's plans to sell more assets and the company's own employee-friendly reputation may see the deal go in favour of the workers
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Mumbai: Tata Steel Europe Ltd is not sharing details of its modified pension plan yet, but analysts say they don’t see it substantially reducing its 2 billion pound pension deficit as political interference and vulnerability to any closure may keep the deal skewed in favour of the workers.
“Even lowering the deficit by half would be very difficult," said Goutam Chakraborty, research analyst at Emkay Global Financial Services Ltd. “Ideally, they would be looking to postpone the payment to next year."
The political support for the workers in the UK, Tata Steel’s plans to sell more assets to cut debt and the company’s own employee-friendly reputation may see the deal go in favour of the workers, said two other analysts, who declined to be named.
“Tata Steel has already softened its stance as evident from the package they had offered earlier that got rejected," said one analyst working for a large equity brokerage. “Also the 22 June strike was dropped which shows the company has conceded to some of the workers’ demands in the new package."
The Tata Steel spokesperson said the recommended proposal includes modifications to address the shortfall in the pension fund.
“The recommended proposal includes fair and balanced modifications to existing scheme arrangements. We believe that the proposal continues to provide employees with a high-quality pension," said the spokesperson without giving details of the plan.
Tata Steel posted a consolidated net loss of ₹ 5,674.29 crore in the fourth quarter ended 31 March after it reported a one-time asset impairment charge of ₹ 4,811 crore related to its long products business.
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