Tata Steel reiterates commitment to European strategy

India-based Tata Steel it is still pursuing its European consolidation strategy, it confirmed today.

The firm remains in talks with German steelmaker Thyssenkrupp regarding a potential merger of regional assets, it said, despite allegations made by holding company Tata Sons' former chairman, Cyrus Mistry, this week that the conglomerate may be facing an $18bn write down on its assets — around $10bn of which he attributed to the European steel division.

Tata Steel UK also remains in discussions with relevant stakeholders to find a solution to the affordability of the division's pension scheme liabilities — a key sticking point in the discussions with Thyssenkrupp.

Tata Steel highlighted progress at its new Kalinganagar steel plant, in the Indian state of Odisha, which produced 1mn t of hot metal within less than six months of being commissioned. The combined monthly sales of Tata Steel Jamshedpur and Kalinganagar exceeded 1mn t for the first time in September, it said.

Tata Steel is keen to assure stakeholders and market participants that business is proceeding as normal, following a turbulent week that began with the abrupt removal of Mistry as chairman of Tata Sons — the holding company of Tata Group. The situation has been aggravated by the leaking of an internal email written by Mistry immediately after his removal, in which he made a string of allegations regarding the conglomerate's finances and unprofitable divisions.

Tata Sons has denied all of Mistry's allegations, but is coming under scrutiny from regulators and financial authorities, which are seeking greater clarity about its finances.