London: Tata Steel has put the process of selling its major British assets on hold because of the uncertainty caused by the Brexit vote and surrounding pension liabilities and will now also look at forming a joint venture, the company said.
Tata Steel put its British operations up for sale in March, including its Port Talbot plant in southern Wales, threatening thousands of jobs, but an industry source told Reuters on Thursday that the sale had been put on hold.
The firm said on Friday the June 23 referendum, when Britons voted to leave the European Union, and issues around the pension scheme had prompted a rethink.
"The bids have also been reviewed in the light of the uncertainties caused by the UK referendum and the outcome of the UK Government’s consultation on the British Steel Pension Scheme," the firm said in a statement.
"Consequently, Tata Steel has now entered into discussions with strategic players in the steel industry, including Thyssenkrupp."
Germany's biggest steelmaker Thyssenkrupp has said it wants to play a role in any consolidation of the European steel market, which is saddled with excess production capacity and a weak demand outlook.
Tata Steel said it will also begin separate processes for the potential sale of its Speciality Steels business and the northern English Hartlepool pipe mills except for its 20-inch Tube Mill.
Liberty House Group, which an industrial source said on Thursday was to bid for Tata Steel's specialty steels and pipeline tubes business, said on Friday it will continue discussions with Tata about acquiring a number of assets.
There were signs this week that Brexit-induced uncertainty and a sharp fall in sterling would hurt a wide range of companies, with investors warning the economy could tip into recession, hammering consumer and business confidence.
Tata Steel employs some 11,000 people in the UK. Its specialty steel and tubes business together employ some 2,000 people, meaning the fate of another 9,000 steel jobs and thousands more jobs indirectly related to steelmaking is now uncertain.
Published Date: Jul 09, 2016 09:17 am | Updated Date: Jul 09, 2016 09:17 am