Tata Steel's plans to seek partner on European steel assets unchanged - source

By Promit Mukherjee MUMBAI (Reuters) - Tata Steel Ltd's plans for its European steel business are unchanged and the debt-laden firm is still seeking a partner for a joint venture to run the assets, according to a source present at a closed-door analyst briefing on Thursday. In March, Tata Steel decided to put its British steel operations on sale following heavy losses linked to a flood of cheap Chinese imports and low demand in the region. The process was suspended in July because of uncertainty over Britain's vote to leave the European Union. The company has since said it is exploring opportunities for a partnership for its entire European steel business, which also includes a steelworks in the Netherlands. Tata Steel has previously said that Germany's ThyssenKrupp AG is one of the companies with which a partnership is being discussed. The source, who spoke on condition of anonymity, said Tata Steel officials told analysts there were no concerns about the group's steel business stemming from the departure of its former chairman Cyrus Mistry as boss of Tata Sons [TATAS.UL]. Analysts had said the departure of Mistry from the chairmanship of the group could hurt the prospects of the merger or sale of the European steel business as he played a big role in discussions. Sources in Britain and Germany said it was too early to know the implications of the boardroom changes, but they had not heard talks were off. In any case, discussions have been slow and difficult as negotiators face big obstacles, such as dealing with a very expensive pension scheme Tata Steel inherited when it bought the British operations. Mistry, in a letter to the board of Tata Sons on Tuesday, criticised the group's foreign acquisitions, saying the investments in loss-making businesses could lead to writedowns of $18 billion. He also said in the letter that an aggressive acquisition strategy, during Ratan Tata's previous tenure as chair, led to the company's European steel business suffering "potential impairments in excess of $10 billion, only some of which has been taken as of date." In response, Tata Steel said on Thursday that its financial statements presented a true and fair value of the company. In an interview with Mint newspaper on Thursday, the head of ThyssenKrupp India, Ravi Kriplani said the discussions with Tata Steel on a joint venture were at a preliminary stage and far from fruition. Alex Flynn, a spokesman for Unite the Union, said the body that represents British steelworkers was seeking clarity concerning protection of jobs under any new owner and had no knowledge that talks had been called off. The Welsh and British governments declined to comment. (Additional reporting by Barbara Lewis in London and Georgina Prodhan in Frankfurt; Editing by Alexandra Hudson and David Evans)