Companies & Sectors
Tata Steel to sell Europe long products units to Greybull

Long products include wire rods, rails and billets used by construction, engineering, energy and automotive industries

 
Tata Steel announced an agreement to sell its long products Europe business to investment firm Greybull Capital for a "nominal" consideration. The long products Europe business employs 4,800 people -- 4,400 in the UK and 400 in France.
 
"The sale for a nominal consideration, would be in exchange for Greybull Capital taking on the whole of the business, including assets and relevant liabilities, and securing an appropriate funding package," the company said in a statement.
 
"The deal will be completed once a number of outstanding conditions have been resolved, including transfer of contracts, certain Government approvals and the satisfactory completion of financing arrangements."
 
Long products include wire rods, rails and billets used by construction, engineering, energy and automotive industries. Flat products include coils, and heavy plates used for automotives, heavy machinery, pipes, tubes, construction, packaging and appliances.
 
"This sale is the best possible outcome for employees who have worked relentlessly to ensure the business’s survival, and helped to make it attractive to a potential buyer," said Bimlendra Jha, executive chairman of the stand-alone long products Europe business.
 
The pact follows an accelerated process of talks between Tata Steel UK and Greybull Capital, and considered an important milestone on the road toward continuing steelmaking in Scunthorpe and steel processing in other locations in the UK and France.
 
The sale covers several UK-based assets including the Scunthorpe steelworks, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities, as well as a mill in northern France.
 
"Under these current challenging conditions in Europe with soaring levels of imports from China, we are happy Tata Steel UK and Greybull Capital have entered the final stage of completion of the sale of shareholding in longs steel UK," said Hans Fischer, chief executive for Tata Europe.
 
"This transaction will offer a future for long Products Europe business and its 4,400 employees.”
 
Having suffered nearly $3 billion in losses on its UK operations, Tata Steel had said this month that it will explore options to put its entire portfolio there up for sale, some 10 years after it forayed into Europe by acquiring the Anglo-Dutch Corus for over $8.1 billion.

 

Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Priority sector lending certificate good even for state-run banks: Moody's

According to Moody's, the Indian central bank's move allowing banks to buy and sell such certificates and manage their priority lending portfolio is helpful

 

The Reserve Bank of India's (RBI) guidelines on priority sector lending certificate is credit positive for even nationalised banks without expertise in lending to that sector, said credit rating agency Moody's Investors Service.
 
According to Moody's, the Indian central bank's move allowing banks to buy and sell such certificates and manage their priority lending portfolio is helpful.
 
"We expect this development to benefit banks with significant gaps in meeting their priority sector loan requirements, including Bank of India, Bank of Baroda and IDBI Bank Ltd. Their lending exposures will likely be streamlined to their core segments, improving operating efficiencies. Meanwhile, we expect that banks with priority sector lending surpluses will have additional contributions," it said
 
The RBI recently relased guidelines for priority lending certificates, under which banks can buy and sell priority lending credit certificates.
 
Generally a bank has to lend 40 percent of its loan to priority sectors - agriculture, education, social housing and others.
 
"Banks that did not meet this threshold were required to place deposits with the Rural Infrastructure Development Fund, which has comparatively lower yields and thus serves as a key disincentive for banks to fall below their priority sector lending targets," Moody's said.
 
With the introduction of priority sector lending certificates, banks without the ability to generate priority sector loans will no longer need to drive lending in this segment organically.
 
On the other hand, it can buy the certificate from banks that are majorly into this segment for a price.
 
As there is no transfer of credit risk, the funding requirement continue to be retained by the originating entity, Moody's said.
 
Currently banks that fall short of priority sector lending target, buys the portfolio from other lenders to fulill their obligations.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 

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Japan starts home delivery service trials using drones

The drones ferried merchandise, including bottles of wine and milk cartons between several points in the city where the country's law restricting the use of drones does not apply, EFE news reported citing Kyodo agency

 

The Japanese government on Monday began the trial of a drone home delivery service in the city of Chiba, supposedly the first of its kind in an urban area.
 
The drones ferried merchandise, including bottles of wine and milk cartons between several points in the city where the country's law restricting the use of drones does not apply, EFE news reported citing Kyodo agency.
 
They successfully landed in parks, commercial facilities and even on the roof of a residential building without any damage to the goods.
 
In the next stage, the drones will transport packages from Tokyo Bay to Chiba, a distance of 10 km, with the aim of developing technology to ensure stable flight during rain and strong winds, and to set up a traffic control system for drones.
 
Japanese e-commerce giant Rakuten, tech firm NEC and Aeon supermarket chain, among other companies, are counting on the service to become operational in 2020 when Tokyo will host the Olympic Games.
 
The government also seeks to implement a system to deliver medicines to isolated areas by 2018, for which it will need to approve a new law to regulate the routes and merchandise permitted for transport planes or drones.
 
Japan did not have specific laws regarding drones till September last year when a drone with radioactive material was found on the roof of Prime Minister Shinzo Abe's house.
 
The current Civil Aeronautics Law bans drones from flying over crowded residential areas or around airports without government permission.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 

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