Tata Steel's joint venture with Thyssenkrupp hits delay
London: Tata Steel's proposed joint venture with German steel major Thyssenkrupp is likely to be hit by delays as workers and investors questioned the viability of the current business plan.
Representatives from the Tata Steel Europe European Works Council (EWC), formed to address issues of transnational interest that significantly affect the Indian steel company's employees in Europe, said in a statement this week that they remained "unconvinced" and also found Thyssenkrupp's lack of engagement with them "deeply regrettable".
"The EWC acknowledges there is an industrial rationale for pursuing this JV, but with the matters outstanding the EWC remains unconvinced that this partnership with Thyssenkrupp would be in the best interests of the TSE (Tata Steel Europe) operations and the employees we represent, the statement notes. "At this stage there are still significant gaps in our knowledge which makes it difficult to reach definitive conclusions. In particular, the financial structure of the deal remains a work in progress and there is very little available detail on the JV business plan, it notes.
The statement is expected to delay the JV process, coming on the back of doubts expressed by American asset management fund Elliott Management Corp.
In a recent letter addressed to Thyssenkrupp, Elliott highlighted the divergence in performance in Tata and Thyssenkrupp's steel businesses and stressed that the German firm must seek a better deal.