Tata Steel shares are in focus today; here is why

The JLoI is for the first phase of transition to low CO₂ steel production and to improve the healthy living environment around the IJmuiden site.

"The JLoI sets out the aims and objectives of the parties but is neither binding on the execution of the projects or the subsidy nor with respect to any of the other commitments made herein by any of the parties, with the exception of the commitment of the parties to good faith negotiations towards a tailor-made agreement, including the commitments related specifically to the period prior to the tailor-made agreement," it said.

Both parties will continue working towards the final tailor-made agreement in the coming months, including after the elections and the formation of the new government in the Netherlands.

The final investment decision will be considered by the Tata Steel Board in the process to come to the final binding tailor-made agreement, the press release added.

T V Narendran, CEO & Managing Director of Tata Steel and Chairman of the Supervisory Board of Tata Steel Nederland, said, “We would like to thank Minister Hermans, her colleagues in the Cabinet and the team from the Netherlands Government and from the province of North Holland who have engaged constructively and painstakingly with us over the last 2 years to complete this first step in our journey towards creating a sustainable long-term future for Tata Steel Nederland.

"There are a lot of issues to resolve and work to be done before us. This includes work we have to do internally, including the completion of the engineering preparedness for this very complex transition & addressing statutory and regulatory aspects related to the coke and gas plants," the MD added.

It also involves external issues, including satisfactory resolution of critical policy matters impacting the investment case, obtaining permits for the projects, and agreeing on detailed terms in the binding agreement "before we can consider proceeding towards the investment decision."

Narendran added, "We are also closely monitoring the policy developments in the EU on CBAM and in the Dutch Parliament regarding the challenges of the 2030 CO₂ reduction targets. In parallel, we are also looking at prioritisation, optimisation and sequencing of the capex spend such that it is affordable for all stakeholders."

The press release added that TSN has not yet completed the full engineering of the integrated project and therefore has not finalised the total spend. The capital expenditure spend and phasing will be finalised at the stage of signing of the tailor-made agreement and at the point of making the final investment decision, and the project execution will also be spread over several years.

The Dutch government intends to support up to €2 billion under the JLoI.

Additionally, TSN has made an application to the EU Innovation Fund for nearly €0.3 billion. The remaining amount is expected to be funded by a combination of the cash generated and contributed by Tata Steel Nederland, project financing debt, and funding procured by Tata Steel Limited over the period of project spend.