BackTata says not going ahead with UK plant stake sale
Tata says not going ahead with UK plant stake sale
PremiumLegal issues: The Corus steelworks at Teesside, northern England. Nigel Roddis / Reuters
Mumbai: Tata Steel Ltd will not sell a stake in its Teesside plant to Marcegaglia SpA and Dongkuk Steel Mill Co Ltd, who were part of a consortium that cancelled a major contract to buy the plant’s output, a senior Tata group official said.
In January, Italian steel maker Marcegaglia and South Korea’s Dongkuk had agreed to buy an 80% stake in the unit, valuing it at an estimated $600 million (Rs2,862 crore).
“There is no question of selling the plant to them now," J.J. Irani, a director of Tata Sons Ltd, the holding company for Tata firms, told reporters on Wednesday. “The operations are still on. It is a legal case so we can’t talk."
Irani also said he expected hot-rolled coil prices to stabilize at $375-400 a tonne, down from current rates of $400-415 a tonne.
“We can see this stabilization happening immediately from now...," he said. “Because Chinese prices have been in that region for almost a year, and China has a lot of influence on the world."
The World Steel Association forecast last month global steel demand would tumble 15% in 2009, its steepest fall since World War II.
However, Irani expected Indian steel demand to rise 5-8% this year. While slowing, the Indian economy is still expected to grow around 6% in fiscal 2010.
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