Tata Steel exploring alternative and more sustainable options in Europe: Koushik Chatterjee

In a chat with ET Now, Koushik Chatterjee, CFO, Tata Steel, says as , the pound has lost a lot of ground compared to the last 12 months, that has enhanced some of the competitiveness of UK manufacturing.

ET Now: News has come that Tata Steel has decided to cancel the of sale of its assets in UK due to Brexit uncertainties and is in talks with Germany’s Thysssenkrupp for a joint venture. Koushik Chatterjee: Let me explain. The board has revived all the bids that have come. The board has considered the bids in light of the commercials that have come into the bids, in light of the future sustainability of the business from a wider stakeholder perspective. They have also revived the bid in the context of the recent outcome of the EU referendum and the current political uncertainty in the UK and have taken a holistic view that we should look at exploring alternative and more sustainable options for Tata Steel in Europe and therefore we have initiated conversations with other strategic players and we will see as to how that conversation moves forward.

There are certain issues we got to resolve in terms of whether the UK business can form part of this combination going forward which includes settlement of or an outcome for the British Steel Pension Scheme which also includes the impact of the negotiations that we have with the unions going forward and all the policy ask and other support that we have been talking to the UK and the Welsh government. So these are some of the outcomes that we will have to look at. But this is a much wider potential strategic conversation than only the UK business.

ET Now: There is one question because you have cleared the air finally on what is the official position of the board. If you could just throw some light on one aspect that many analysts have been talking about and that is that post Brexit perhaps the viability of the UK steel sector has come into question. Do you think it is going to hurt the sale prospects going ahead? Koushik Chatterjee: I do not know what the basis is of the analysts who are talking about the viability because typically as we see in India as the rupee actually weakens, the viability improves. So as we speak today, the pound has lost a lot of ground compared to the last 12 months and that only enhances some of the competitiveness of UK manufacturing in total for those which are exported. So I do not think that uncertainty of the political situation is certainly an issue that we need to resolve and find. I am sure that a country like UK will get to a stable situation soon, but these are more strategic long-term issues and I think we are looking at the whole of Tata Steel European portfolio and not only limited to Port Talbot or Tata Steel UK and see as to how we can create a more sustainable solution for this.

ET Now: Optimistic as always, but there is one aspect which is the UK trade unions and they have been crying foul about there not being a clear timetable and there has been voices from the UK Parliament saying that perhaps Tata Steel and the UK Government needs to come out with a clear roadmap as far as the completion of this deal is concerned because it has been in the pipeline for a long time and there are lots of jobs at stake. Could you give us a sense of how soon do you expect, I know these are still preliminary discussions as you pointed out, there are still many bidders who are lining up but could you give us a sense of the timeline because the timeline is what is keeping the unions there busy and as you know it is a politically sensitive deal? Koushik Chatterjee: I would only say that we are fully engaged with the union leadership in the UK. I have just even had a chat with them a while back and we have always been in constructive conversation with them. So I do not think that is an issue which anybody needs to worry because we have a very constructive and close relationship with the unions. Employees are important for us and very important for us and therefore we will always look to a solution which is the best. From our perspective, the effort, these are not timeline issues to be honest. It is issues about whether you can frame outcome which needs all your requirements from a company point of view, from a stakeholder point of view, from a shareholder point of view. So I do not think that is to be an issue.

ET Now: There are issues around pension liabilities... Koushik Chatterjee: That is a point of discussion. We are engaged with the trustees, with the unions, with the government and there was a consultation process on Section 67. There are other routes and conversations that we are engaged with. So hopefully, we need to find a solution. What the solution is these are very complex and technical matters and cannot be explained in the middle of the road.