Tata Steel is reportedly initiating consultations with U.K. unions to discuss the restructuring of its Port Talbot site, transitioning to electric-arc furnace production.

What Happened: Tata Steel Managing Director and CEO TV Narendran confirmed that discussions on job cuts were forthcoming, dispelling media reports suggesting the delay of a job cut announcement after a press conference was cancelled following the release of weak quarterly results, Moneycontrol reported.

While acknowledging the impact on jobs, Narendran emphasized the goal of ensuring a sustainable business in the UK that continues to produce steel. Reports had indicated the potential closing of blast furnaces at the Welsh plant and preparation for up to 3,000 job cuts, including the closure of two blast furnaces.

See Also: WhatsApp’s Massive Crackdown: 71 Lakh Indian Accounts Disabled In September

Why It Matters: Narendran clarified the delay, explaining that it was due to timing issues related to the results release, and discussions with unions regarding the extent of job cuts were ongoing. He highlighted that, after consultation, clear directions and timelines would be established.

United the Union in the UK expressed opposition to Tata Steel’s actions and called upon the government to intervene, potentially taking a stake in the UK steel industry. In September, the UK government agreed to provide a grant of £500 million (₹4,162 crore) to support Tata Steel’s decarbonisation efforts at the Port Talbot project in Wales after months of negotiations to safeguard the project.

Analyst’s View: Analysts at Citi downgraded the stock to “sell” from “buy”, citing various factors such as concerns over domestic steel prices and doubts over the UK business amid uncertainty on restructuring planned and future profitability. The firm also slashed the price target to ₹100 from ₹140.

The brokerage also said the firm’s net debt/EBITDA now sits at a multiple of 3.5, which is its highest since FY 2020.

Price Action: Tata Steel’s share price was languishing in the red for most of the morning, with its share price down 0.085% at ₹118.00 on Friday.

Read Next: How To Check IPO Allotment Status For Cello World