Coronavirus crisis | Tata Steel's European units may not receive funding from parent: Report
On April 13, Tata Steel's board approved a plan to raise as much as Rs 7,000 crore through non-convertible debentures (NCDs).
April 29, 2020 / 10:35 AM IST
Tata Steel's European businesses may not receive financial support from the parent company and may have to rely on the UK government's help for survival during the COVID-19 pandemic.
Tata Sons might not inject further capital to assist Tata Steel's loss-making UK and other European units, according to a report by The Economic Times.
Tata Sons needs to allocate funds for other financial commitments, officials told the publication.
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Moneycontrol could not independently verify the story.
Tata Sons declined to comment when approached by The Economic Times.
"European steel demand has sharply reduced compared to normal conditions and many of our customers paused production, including European car manufacturers. We, therefore, reduced production at some of our European mills to match this lower demand. Our European business is focused on preserving cash and liquidity to tide it over during the challenging period," a Tata Steel spokesperson told the publication.
The UK government might provide only one-fifth of the cost required, sources told the paper.
Media reports suggest Tata Steel has sought 500 million pounds (Rs 4,750 crore) from the UK government.
On April 13, Tata Steel's board approved a plan to raise as much as Rs 7,000 crore through non-convertible debentures (NCDs).Follow our full coverage of the COVID-19 pandemic here.