Tata Steel pensions deal paves the way to merger

Tata Steel has sealed a major pensions deal   Tata Steel's distribution and service centre at Wednesfield

Clearing a major hurdle in the potential Tata Steel-Thyssenkrupp tie-up for their European steel businesses, Tata Steel said on Friday that it has signed a regulated apportionment agreement (RAA) with the Trustees of British Steel Pension Scheme (BSPS) to separate the pension scheme from its United Kingdom business.

Britain's Pensions Regulator revealed Friday its initial backing to proposals by industrial giant Tata Steel UK Ltd.to pump £550 million ($713 million) into a company savings plan to ditch the scheme and avoid bankruptcy.

As part of the arrangement, Tata Steel UK will make a payment of £550 million to the British Steel Pension Scheme (BSPS), while 33 per cent of Tata Steel UK's equity will be issued to the scheme's trustee. The Pension Protection Fund has also issued confirmation of non-objection to the RAA on Friday.

The pact would be effective after Tata Steel pays 550 million pounds (S$972.5 million) and a 33 per cent equity stake in the United Kingdom operations to the trustee, the steelmaker said in a separate statement. Should there be no referrals to the United Kingdom court system in the next 28 days, TPR is expected to confirm its approval, subject to TSUK making a £550 million payment to the scheme.

Tata Steel today announced clinching of a new agreement that will detach the 15-billion-pound British Steel Pension Scheme (BSPS) from its United Kingdom business. "In order to continue to trade, TSUK required ongoing funding from the Tata Steel Group, which it was not willing to provide until funding challenges for the existing scheme were resolved".

"The modified benefits offered by New BSPS are expected to be better than PPF compensation for the vast majority of current pensioners and for many other members". "What this delivers is a more realistic promise to scheme members, without the destruction of value that comes with the current PPF route".


"If stressed pension funds were allowed to restructure in a more transparent way, a pension fund equivalent of Chapter 11, risk could be better shared between the company, the members and the PPF", Rosenberg said.

It said: "For over a year our members have feared for their security in retirement, and this announcement helps to bring that uncertainty to an end".

Koushik Chatterjee, Tata Steel's Group Executive Director, said the RAA process has been a long and detailed one, and thanked everyone involved, including the United Kingdom and Welsh governments, for their constructive engagement through the process.

All members of the British Steel Pension Scheme will now have a choice of joining the new scheme or come under the Pension Protection Fund (PPF), a pensions lifeboat.

Chatterjee added: "The RAA is one important milestone in Tata Steel UK's journey towards a sustainable and enduring future, with pension obligations, whose risk profile would be consistent with the underlying business". "The net financial impact of the RAA including the payment of the agreed amount would be reflected in the Q2 FY'18 financials for the company", said he.

Related news:

Hot News

isis-killer-beheading-video-story-top Public Service Commision urges residents to call before digging
Aug 12, 2017 - 14:07
An operator will gather information about digging plans, and notify local pipeline and utility companies about the project. PSEG Long Island operates the Long Island Power Authority's transmission and distribution system under a 12-year contract.

isis-killer-beheading-video-story-top Chandigarh Court Sends Vikas Barala, Friend To Judicial Custody Till Aug 25
Aug 12, 2017 - 13:55
Meanwhile, investigators are still clueless about the whereabouts of the vehicle and the persons accused, police said on Friday. On a complaint by Varnika , the duo was arrested on August 5 by the Chandigarh police.

isis-killer-beheading-video-story-top RPC Singh replaces Sharad Yadav as the party leader in Rajya Sabha
Aug 12, 2017 - 13:50
Further, the JD (U) recently allied with the BJP after party chief Nitish Kumar quit the "grand alliance" coalition in Bihar. Amid stifling tension in JD (U) corridors, Congress President Sonia Gandhi called for a unity meet on Friday.

isis-killer-beheading-video-story-top Mum asks for Facebook group to reschedule solar eclipse
Aug 12, 2017 - 13:37
If you are in its direct path, you'll never forget it. "It's a chance to experience space science without having to leave home". When should I look for it? They say mom was right: You can damage your eyes staring at the sun, even the slimmest sliver of it.

isis-killer-beheading-video-story-top Everton manager Ronald Koeman confident Swansea's Gylfi Sigurdsson deal will go through
Aug 12, 2017 - 13:27
I heard some rumours that talks had broken down but still we are in negotiations with Swansea, ' insisted Koeman, whose team open their Premier League campaign against Stoke tomorrow.

isis-killer-beheading-video-story-top North Korea standoff wipes $1trn off global stocks
Aug 12, 2017 - 13:25
The dollar pulled back against the euro and other currencies after the Consumer Price Index rose a tame 0.1 percent in July. The 30-year bond was last up 4/32 in price to yield 2.7871 per cent, from 2.794 per cent late on Thursday.

isis-killer-beheading-video-story-top US Navy destroyer challenges Beijing in South China Sea
Aug 12, 2017 - 12:54
Interaction between the Chinese and U.S. ships was " safe and professional ", according to an unnamed United States official. China's Defence Ministry said it expressed its strong opposition to the United States for the "show of force".

isis-killer-beheading-video-story-top Pentagon denies civilians killed in Afghanistan airstrike
Aug 12, 2017 - 12:47
A spokesman for the US military in Kabul said officials were aware of the reports but would not comment immediately. All the victims, which included women and children, were civilians and they were from one family.

isis-killer-beheading-video-story-top Alan Shearer sends message to Arsenal fans about Alexandre Lacazette
Aug 12, 2017 - 12:26
Wenger also stated that lack of focus on the part of his defenders cost Arsenal the first two goals they conceded. Arsene Wenger is relieved Olivier Giroud didn't take him up on the offer to leave Arsenal .

isis-killer-beheading-video-story-top Us strategy in Afghanistan: Trump promises a decision soon
Aug 12, 2017 - 11:53
We need to get - it's going to be tested quickly over the course of literally weeks as to whether or not China's serious. The president has been in this back-and-forth, a kind of public feud with the Senate majority leader, Mitch McConnell.

isis-killer-beheading-video-story-top Elderly man found dead in Denver elevator pushed emergency button twice
Aug 12, 2017 - 11:50
Authorities determined that Komisarchik pushed the emergency button twice on July 6 at 9.09am and 9.17am, and got no response. MEI Total Elevator Solutions monitors the elevators at the Denver apartment complex, according to the Daily Mail .

isis-killer-beheading-video-story-top Back nine show ensures Lahiri makes cut at PGA Championships
Aug 12, 2017 - 11:23
It's not like I'm hitting the ball crooked". "I'm probably not playing as well as I did at the end of past year ", Matsuyama said. He took two shots to get out of the sand and two more to find the green from the primary rough before two-putting for a 7.

isis-killer-beheading-video-story-top OnePlus 3 and 3T to get Android O as final software update
Aug 12, 2017 - 11:23
As it pertains to the latest security and OxygenOS updates, the August patch will come out before the OxygenOS 4.5 update. So today the Chinese company's Head of Product, Oliver Z., has made a decision to answer a few questions on the matter.

isis-killer-beheading-video-story-top Bills Send Sammy Watkins To The Rams
Aug 12, 2017 - 11:08
Roseman, the Eagles' executive vice president of football operations, said the trade was the most hard he's ever had to make. Buffalo tapped Watkins fourth before Mike Evans went seventh to Tampa Bay and Odell Beckham Jr . went 13th to the Giants.

isis-killer-beheading-video-story-top Possible Date For Ronda Rousey's Next WWE Appearance
Aug 12, 2017 - 10:46
The former UFC Women's Bantamweight champion has had fairly good relations with Triple H, Stephanie McMahon and the WWE. Flair, Bayley, and Lynch had a confrontation with all four of the MMA Horsewomen, with Banks joining them on Facetime.