Tata’s UK steel sale is credit positive: Moody's
The announcement of an agreement between Tata Steel and Greybull Capital LLP, with regard to the sale of its European long-products division, is credit positive for its parent company, said Moody’s.
However, based on the available information till date on the extent of debt and liabilities to be transferred, the contract at the moment will not impact the ratings for Tata Steel and its UK Holdings, the credit rating agency stated in a release.
“In the midst of a challenging economic atmosphere, the selling of the business of long products is credit positive, while a timely and smooth divestment of the European business is a major rating sensitivity,” it added.
Tata Steel UK Holdings (TSUK Holdings) announced the signing of its long-products business for a minimal consideration, in return Greybull Capital will take over the complete business of long products, that encompasses assets and related liabilities, and securing a suitable package for funding the divested business.
The sale deed of the European businesses includes the steel plant in Scunthorpe, an engineering workshop in Workington, two beam mills in Teeside, a design consultancy in York, a mill in northern France and allied distribution facilities.
With the selling of European business to Greybull Capital, the remaining businesses of TSUK Holdings in UK comprises mainly of the operations at Port Talbot, manufacturing slabs, cold rolled coils, hot rolled coils and galvanised coils.
