Tata Steel said to mull transfer of UK pension to insurer

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Mumbai: Tata Steel Ltd. is considering transferring its UK pension liabilities to an insurance company, two people with knowledge of the matter said.

Potential bidders of the company’s UK steel unit don’t want to be saddled with the pension liabilities, the people said, who asked not to be identified because the talks are private. Tata would move the pension assets to an insurance company and let it manage the investments and liabilities, they said.

Tata Steel announced plans in March to sell its UK operations, putting 15,000 jobs at risk and raising the alarm for British politicians. The company is trying to negotiate the sale of its big Port Talbot plant in South Wales along with other assets around the UK European steelmakers are struggling with prices that have fallen by more than 50 percent since 2008 and global supply glut.

The pension plan has assets of about £15 billion and higher liabilities, they said. Tata would pay as much as a billion pounds to the buyer, they said.

Liberty House Group and Excalibur Steel consortium are among seven bidders that have moved to the next stage of the sale process, the people said. The successful buyer could pay a token amount, one of the people said.

Two calls made to Tata Steel spokesman Chanakya Chaudhary were not answered.

Shares of the company have climbed 26% this year.