Friday, November 27, 2009

Tata Steel seeks partners for Teesside unit

Tata Steel is looking for joint venture partners to run its Teesside plant in England, according to Mr Kirby Adams, CEO of Tata-Steel Europe.

The plant belongs to Anglo-Dutch steelmaker Corus, which Tata Steel acquired two years ago.

The plant had run into trouble early this year after a consortium of buyers, which had committed to buy nearly 80 per cent of the Teesside plant output, terminated the contract. The loss before interest, depreciation, taxes, amortisation (EBIDTA) on account of Teesside plant in the first half was $220 million.

The four buyers that had backed out were Italy-based Marcegaglia SpA, Korean firm Dongkuk Steel Mills Co Ltd, Brazil’s Duferco Participantions Holding Ltd and Alvory SA, a subsidiary of Latin American steelmaker Ternium.

The consortium had signed an Offtake Framework Agreement (OFA) in 2004 to buy 78 per cent of the plant’s production for 10 years. They terminated the agreement before the completion of the term.

Tata Steel has undertaken arbitration and legal proceedings against the companies.

Full story

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