CYRUS MISTRY’S PLEA TO SHAREHOLDERS. Tata Steel: unravel cross-holding in group companies

Tata Steel is exploring avenues to unravel its cross-holding in group companies and exit strategically from unrelated business.

In a statement to the Tata Steel shareholders ahead of the crucial extra ordinary meeting on December 13, Mistry said in the last three years, Tata Steel has divested its stake in Titan and Tata Motors and will continue along this journey as part of its strategic plan.

Denying criticism that the Tata Steel board only looked at UK investments through a short-term financial lens, Mistry it is furthest from the truth, as can be gauged from continued investments in these assets. The total capital employed in Tata Steel Europe grew from ₹67,000 crore in FY’12 to over ₹93,500 crore in FY’15. The amount of capital earning negative returns posed a risk to the overall group, he said.

“We believe it is important to tackle some of the structural challenges with the UK assets, namely the potential high pension deficits, high energy costs and high taxes,” he said.

Tata Motors could soon unveil a platform strategy to improve competitiveness in the global market, Cyrus Mistry said in a letter to shareholders.

Mistry said the company will soon unveil a platform approach to overcome several setbacks it had to bear in the last four years.

He said the new platform strategy will “ensure competitiveness and access to the latest global technology".

A platform strategy could help Tata Motors reduce complexity and improve service by offering standardised, interchangeable set of parts from which to build a variety of cars, a strategy that’s been adopted by several global automakers, including Volkswagen and Toyota.

Mistry acknowledged that Tata Motors was unable to move fast enough under his tenure in the last four years even while competition intensified.

Cyrus Mistry has told shareholders of Tata Power that the deal to acquire Welspun was approved by the company board after finding it as a good fit. Tata Power has convened an EGM on December 26 to remove Mistry as director of the company. The Welspun deal is understood to be one of the reasons for the company seeking his ouster.

Defending his tenure, Mistry said, “ Over the last four years, the management placed a significant focus on improving both capacity and profits across generation, transmission and distribution in all of Tata Power.”

In an emotional note to the shareholders, Mistry said it was also important to identify good projects for Tata Power which would earn better returns for shareholders.

“As part of its strategy, the management identified renewables as a key area to increase generation capacity, and the Board agreed. When the opportunity for acquiring Welspun Energy came up, the Board approved the project as a good fit for Tata Power.”

Tata Chemicals is confronted with many challenges, including the biofuel operations in Nanded, JOil in Singapore and Grown Energy Zambeze in Mozambique, said Cyrus Mistry, former Chairman, Tata Chemicals.

In a letter to the company’s shareholders ahead of EGM on December 23 to decide on his ouster, Mistry added the low-cost water purifiers (Swach) had been bleeding since inception.

A strategic plan for the whole company, with focus on transition from the traditional asset-intensive, commodity chemicals and regulated fertilisers play to building a more knowledge-intensive and brand-led consumer and specialty chemicals company – leveraging the strong cash flows of the globally leading soda ash business, he said.

The company had invested in a premium ash Magadi plant, however, the plant could not reach its product specifications due to technical challenges and raw material issues.

Further, volatility in energy prices and anticipated increases in royalty due to new mining regulations added to the woes of the Magadi operations. Our Bureau

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