OREANDA-NEWS. India-based steelmaker Tata Steel is considering exiting its UK operations, as it said its long-term competitiveness has been "significantly impacted" because of large inflows of imported steel into Europe and weak domestic demand.

Tata, which bought UK-Dutch steelmaker Corus in 2007 for $8.1bn, said it would consider all options for restructuring its holdings, including selling the business in parts or as a whole.

"Given the severity of the funding requirement in the foreseeable future, the Tata Steel Europe board will be advised to evaluate and implement the most feasible solution in a time bound manner," the company said.

Tata's board also rejected a plan proposed by its UK subsidiary to restructure the UK strip products business. The plan was unaffordable, required significant capital investments over two years and the payoff was uncertain, it said.

Tata's UK business experienced difficulties soon after the Corus acquisition, as the 2008 financial crisis hit demand for industrial products in the developed world. The company has been unable to fully recover since, despite multiple rounds of job cuts and capital infusions, along with the sale and mothballing of some facilities.

Oversupply of steel in the European market because of the high volume of imports, high manufacturing costs, currency volatility and weak domestic demand has hobbled its UK competitiveness, with a sharp deterioration in its financial performance in the past 12 months, Tata said. It has booked asset impairments of ?2bn ($2.9bn) over the past five years.

Revenues from its European operations fell by 15pc from a year earlier in the first nine months of the 2015-16 fiscal year ending 31 March to 511.47bn rupees ($7.7bn), recording an operating loss of $51mn.

Tata's board meeting yesterday follows representatives from the UK steelworks and trade union Community visiting Mumbai in an attempt to persuade board members to support a plan to save the Port Talbot steelworks in Wales. Tata said in January that it would be cutting 750 jobs at Port Talbot.

The company will continue negotiations with investment firm Greybull Capital for the sale of its UK long products business, as well as with the UK government on the future of its entire UK operations. UK-based steel producer and international steel trading company Liberty House last week reached an agreement with the Scottish government to buy Tata's Dalzell and Clydebridge plate mills.