Tata Steel accepts $130-mn to settle UK plant loss
S Kalyana Ramanathan / London June 23, 2011, 0:14 IST
Tata Steel’s arm here said it had got $130 million as final settlement from the consortium of global steel buyers which had prematurely terminated, in May 2009, a 10-year purchase contract.
The termination had plunged Tata’s Teesside Cast Products (TCP) unit in northeast England into losses, leading to partial closure and layoffs at the factory. The matter went into arbitration, with Tata claiming a loss of $220 mn from the action.
|The arbitration tribunal upheld the Tata claim that agreement was not validly terminated. On January 5, Tata Steel UK received a partial final award in its favour. Tata Steel, in a statement issued to the stock exchanges in India, said, “Following that partial final award, a commercial settlement to all disputes relating to the offtake agreements was reached and on June 21, Tata Steel completed a full and final settlement of claims with the consortium of former offtakers. As a result of this settlement, Tata Steel has received an aggregate sum of approximately $130 million.”|
This final settlement comes four months after Tata Steel UK sold TCP to Sahaviriya Steel Industries, a Thai company, in a deal valuing the business at $469 mn.
The consortium of four buyers which had withdrawn from the 10-year buying contract were Marcegaglia of Italy, Dongkuk of South Korea, the Swiss-headquartered Duferco and Alvory of Uruguay.