Moneycontrol ResearchMarket has reacted positively to news of Tata Steel edging closer to a solution for its Port Talbot plant in the UK. Tata Steel stock trades nearly 1.25 percent higher post the news report. Reports say that the company is moving towards a deal with UK steel workers’ unions to keep its troubled Port Talbot plant open till at least 2020. Union leaders will be taking the new plan with its members, which if approved could see investments into the company in return for concessions on staff terms and conditions. Apart from Port Talbot, Tata Steel is also likely to increase its investment in other UK plants like Shotton, Corby and Llanwern. Out of Tata Steel’s two blast furnace at Port Talbot, one was expected to shut by 2018. But the company’s management is now reconsidering investment of £100 million to reline the blast furnace which will increase its useful life. Under ex-chairman of Tata Sons Cyrus Mistry, Tata Steel was contemplating selling off the consistently loss making UK unit. However, Ratan Tata’s move came as a lease of life to the UK workers. Though market has responded positively to the development, consistent losses from the unit will not go down well with investors. Every decision by Ratan Tata to revive the unit will now be scrutinized by investors closely.Clarity on Tata Steel management’s decision will come after the Extraordinary General Meeting on December 21, 2016.
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