Tata Steel Seeks Exit Route for Non-Profitable Overseas Units

SEATTLE (Scrap Monster): India-headquartered Tata Steel Limited announced revived plans to sell its Thailand steelmaking unit. This is in line with the company’s strategy to focus on investments in the domestic market and exit from less profitable overseas steelmaking units. It must be noted that Tata Steel Thailand has a market value of over $410 million.

Announcing the decision, a company spokesperson noted that it had recently completed offloading its Singapore business, NatSteel Holdings and that it will now explore all options to sell the Thailand unit. It plans to boost domestic investment and carve out exposure to overseas businesses that offer inadequate return on capital. The move will help the company reduce its debt, especially during these difficult times. Incidentally, the net debt of the company had witnessed significant decline from INR 116, 328 crore as on 31^st March, 2021 to INR 78, 163 crore by the end of September quarter this year.

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Earlier in 2019, Tata Steel had finalised the sale of Thailand unit to Chinese HBIS Group. However, the deal was cancelled, following failure of the Chinese steelmaker to obtain necessary approvals.

The revival of its plan to offload the Thailand business will provide an opportunity to restructure its businesses.