Stemcor is reducing headcount across its “core trading and distribution businesses” by 25% as it aims to pay down its $1.2 billion debt, a spokesman for the London-based trading company confirmed Thursday.
“This is commensurate with lower revenues that will follow as a result of our efforts to streamline the business to focus on high performance areas and consistently profitable trade flows,” the spokesman said.
According to the statement, the trading and distribution business will be scaled back, so fewer people will be required to generate less revenue. The spokesman said no lines of business are being dropped in this core segment.
The cuts do not include operations not seen as core, such as its Indian iron ore and pellet assets, which the company is looking to hive off. Bankers at Goldman Sachs advised Stemcor to sell its Indian operations, rather than any European assets, as they would generate a better return.
In a recent letter to Stemcor chairman Ralph Oppenheimer obtained by Platts, JSW Steel’s chairman and managing director Sajjan Jindal made clear his interest in the Indian assets. However, he said Stemcor’s inclination to “consider a proposal driven by the Stemcor Indian management for its stake in the asset,” was “adversely impacting” the board of directors.
Naveen Jindal, the head of Jindal Steel & Power, is in talks with Stemcor’s Indian management with a view to acquiring the assets, which reports suggest are valued around $800 million. In his letter Sajjan Jindal said he believed he could offer a greater valuation for the assets.
The two men are brothers, and their companies part of the O.P. Jindal group.
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