Shares of Tata Steel jumped over 2 percent intraday on Friday, extending its rally. Investors are jubilant that the UK government is willing to acquire 25 percent stake in Tata Steel's UK operations to help potential buyers eyeing ownership of the Indian steel giant's loss-making plants.
The money "worth hundreds of millions of pounds" is being put up jointly by the UK and Welsh governments and will be made available to potential buyers as part of a support package for the crisis-hit steel industry, according to the business department here.
Business Secretary Sajid Javid had earlier said any money would be offered on commercial terms, quashing talks of nationalising the industry. At least two potential buyers have shown interest in buying the business. One option is a management buyout backed by the chief of Tata's Port Talbot factory, the UK's largest steel operation, the BBC reported. Steel company Liberty House, owned by Indian-origin Sanjeev Gupta, has also said it was interested in buying parts of the business.In an earlier report, Kotak had said that complete exit from UK by Tata Steel (post Port Talbot sale) can reduce cash burn in Europe to a mere USD 200-300 million and improve long-term cash flow visibility. Recently, Greybull Capital has signed a deal with Tata Steel to buy its long products business assets in Europe.
At 09:55 hrs Tata Steel was quoting at Rs 360.45, up Rs 6.05, or 1.71 percent on the BSE.
With inputs from PTI
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