Tata Steel warns of closure of UK business

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The stock of Tata Steel, the country’s largest steel producer, has fallen by about 13 per cent in the last one year and the company’s problems and challenges don’t seem to be ending, especially regarding the company’s UK business. The company has issued a warning of uncertainty regarding the continuation of UK business. The two main reasons for this are the bad market and the other is the UK government’s support. In July last year, the company announced that it would take a decision on whether to continue the UK business in the next 12 months. The biggest uncertainty in the UK business is government support, because the company has to shift its steel production process from natural gas and coal to electricity, so that carbon emissions can be reduced. But according to a report, the company will get 300 million pounds from the government, whereas decarbonising the Port Talbot plant alone would cost up to £3 billion and the company has sought £1.5 billion from the UK government.The decision on government support is important because Tata’s life span of blast furnaces is coming to an end in the next 12-24 months and it takes 4-5 years to make electric furnaces. In the March quarter, Tata Steel’s consolidated profit fell by about 84 percent and the profit of the European business was down by more than 60 per cent.

Lessors have made further applications to Directorate General of Civil Aviation to deregister an additional 13 aircraft of Go First. With these latest applications, the number of planes sought to be deregistered now stands at 36. Go First which filed insolvency application has a fleet of 54 Airbus aircraft. Half of them have been grounded for months due to engine problems. Lessors are seeking repossession of their planes before a decision is made on Go First’s insolvency application. Further, DGCA has now issued a show cause notice to Go First questioning why the airline’s licence shouldn’t be cancelled. The DGCA has given Go First till May 24 to respond. It also asked the bankrupt airline to stop selling any more air tickets with immediate effect until further orders. It has also asked the airline to provide refunds to passengers. Some travel agents’ associations and service providers are contemplating applying to the National Company Law Tribunal to seek pending dues.

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