Indian steel producer Tata Steel Ltd has had to call off plans to sell a majority stake in its Southeast Asian assets to China’s state-run HBIS Group, after HBIS Group announced that it has not been able to receive the requisite approvals from the government of Hebei Province in China. The probable cause of the failed deal is considered to be the low profitability and slower growth of steel demand in Thailand compared to other South Asian countries such as Philippines where HBIS has an ongoing investment project.
“Tata Steel will immediately begin engagement with other investors in continuation of its strategy to find a partner for the business,” Tata Steel said in a statement.
Tata Steel had attempted before to sell the majority stake in its Southeast Asian assets which have low profitability. Mumbai-based Tata Steel had decided to sell 70 percent of its stakes to HBIS for $327 million in cash. The combined crude steel capacity of Tata Steel Thailand and NatSteel stands at 2.5 million mt.