JSW Steel joins race to corner Tata Steel’s UK assets
Sajjan Jindal’s JSW Steel will bid for Tata Steel’s UK assets in an attempt to become one of the top three steel-makers in the world.
JSW Steel is among the seven companies short-listed by Tata Steel as part of the sale process.
“As part of its growth strategy, the company evaluates several opportunities, including the current opportunity of UK steel facilities. It is premature to add anything further at this stage,” said a JSW Group spokesperson.
While Tata Steel did not disclose the names of the seven bidders, industry sources and international media reports suggest that JSW Steel will have competition from metals group Liberty House, UK-based investment firm Greybull Capital, US steel firm Nucor, and a team of senior managers at Tata Steel UK, called Excalibur.
JSW Steel’s move seems to have worried investors as its shares fell 2.92 per cent to ₹1,288 apiece on the Bombay Stock Exchange at close on Tuesday.
Analysts said the company’s debt levels, which stand at about ₹40,000 crore, could worsen if it buys the Tata Steel plant in UK. A major worry could be the big pension liabilities of the Port Talbot steel mill in Wales.
Last week, JSW Group had announced plans to acquire Jindal Steel & Power’s power plant for ₹6,500 crore.
This is not the first time that JSW Steel is looking for opportunities in Europe. In 2014, it attempted to buy some assets from Italy’s second-largest steelmaker, Lucchini, but did not make the cut.
Tata Steel Ltd had reached out to 190 potential investors for its UK assets.
“We believe that the bids being taken forward offer future prospects of sustainability for the UK business as a whole,” said Koushik Chatterjee, Group Executive Director (Finance and Corporate), Tata Steel.
In the next phase of the sale process, those interested will be given access to further business information and management team presentations, Tata Steel added.