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Tata Steel says it is not looking to shed North-East operations
A STEELMAKER which employs more than 1,500 workers in the North-East has denied it is looking to sell its European division.
Tata Steel, which has sites in Hartlepool, Redcar, Darlington, Middlesbrough and Skinningrove, in east Cleveland, dismissed claims from an industry analyst that it was considering making cuts to its Corus arm to ease debts of around $11bn.
The firm said the report was a “theoretical exercise” based on speculative and unsubstantiated information.
Global brokerage firm CLSA said the company, which is the world's 12th largest steelmaker, would have to sell either all or part of Corus to reduce debt.
However, a Tata spokesman refuted CLSA's claims, saying: “The author of the report called it a theoretical exercise and the company can confirm there was no input from Tata Steel.”
Tata chairman, Ratan Tata, previously revealed plans to slash costs across the business and warned its European operation would be placed under greater stress due to rising iron ore and coking coal prices.
A report from Abhijeet Naik, a CLSA senior investment analyst, said Tata was looking to sell its non-profitable assets.
He said: “We sense a change in Tata Steel's thought process in recent months and there is now a much stronger focus on asset sales than in the past.
“The aim here is to leverage the balance sheet and rid the portfolio of assets with a questionable outlook.
“We see this change as a positive and, if successful, can achieve a big reduction in risk profile with large earnings and value accretion.”
Tata has invested about £13m in its North-East sites during the past year and won more than £100m-worth of orders to make oil and gas pipes for projects in the Gulf of Mexico.
It employs about 81,600 people in 26 countries and this month reported a quarter net loss of £93.5m.
Last year, it revealed it was cutting 900 jobs in the UK, including about 600 posts at plants in south Wales, and was closing sites in Crosskeys, in Caerphilly county, and Tredegar, near Ebbw Vale.