Tata Steel Plans To Sell UK Speciality Steel Business, Shares Surge

Shares of Tata Steel jumped as much as 2.7 per cent to hit intraday high of Rs 417.60 after the company post market hours on Monday said it has inked an agreement with Liberty House Group, led by India-origin businessman Sanjeev Gupta, to start negotiations for sale of its UK Speciality Steels business for about Rs. 854 crore.

Tata Steel UK on Monday said it has signed a letter of intent (LoI) with Liberty House Group to enter into exclusive negotiations for the potential sale of its Speciality Steels business for an enterprise value of Great Britain Pound (GBP) 100 million".

The deal is subject to due diligence and corporate approvals, it added.

Tata Steel's UK Speciality Steels business includes an electric arc steelmaking and Thrybergh bar mill as well as Brinsworth narrow strip mill in Rotherham, remelt facilities and rolling mill in Stocksbridge, service centre in Bolton and Wednesbury.

Tata Steel, India's biggest steelmaker by overall capacity, has been trying to restructure its UK business, including options such as a sale and partnerships.

In April the company agreed to sell its long-products business in Scunthorpe to investment firm Greybull Capital for 1 pound. In July Tata Steel said it was in talks with Germany's ThyssenKrupp AG over a joint venture for its European operations.

Meanwhile, Credit Suisse has maintained its buy call on Tata Steel for target of Rs 515.

As of 9:46 a.m., shares of Tata Steel traded 2 per cent higher at Rs 414.70, outperforming the Nifty which was up 0.55 per cent.