Tata Steel is looking for more support from the UK government on the energy transition funding as the current assistance of£300 million offered was not enough.
Tata Steel UK had sought a funding of £1.5 billion for the transition to green energy by replacing carbon-intensive blast furnaces with electric arc furnaces over the next few years.
TV Narendran, Managing Director, Tata Steel, told businessline that the company is in talks with the UK government on the energy transition capex
Drop in prices
The business is obviously weak and hence it is not able to generate the cash flows on an ongoing basis. The business in UK was quite strong in the June quarter of this fiscal and after that steel prices started dropping putting pressure on steel companies in the UK, he said.
He added, “The UK government has given support, but that is not enough. So, we are re-looking at the proposal and alternating the configuration using the funds that has been given to us. This may not be the most optimal solution, but somewhat closer to an optimal solution,” he said.
While the company is engaging with the government for further support, he said the energy prices have started falling and one of the big concerns was addressed.
“We will figure out our next move in next few months,” he said.
In Netherlands, the other part of the European business, there are challenges but it is not as exhaustive as it is in UK, he added.
Asked whether the company is scouting for a suitor for the UK business, he said: “it is more about whether anybody is interested... but of course, like we can always explore, but we are not actively looking for any partner.”
Few years ago, the company thought consolidation is a good thing for Europe but the European Competition Commission felt otherwise, so there is no point in pursuing any consolidation opportunities in Europe, he said.
“We do not want to distract the management. We want to stay focused on improving the performance and in the case of UK, planning, a sustainable business for the future,” he said.