Tata Steel disclosed its European arm had failed to reach a deal with British worker unions on its proposal to change the pension scheme there.

In a notification to the National Stock Exchange, the country's oldest steel maker said the unions had declined to support the proposed changes.

The company employs 30,500 in Europe, including 17,500 in the UK. According to media reports, the company planned to suspend the existing scheme, also impacting about 90,000 pensioners in the UK.

Tata Steel's European arm has been in the news for some time. In October, it had announced the intention of selling the long products division, signing a memorandum of understanding with the Geneva-based Klesch group for this. In Britain, the agreement covers the Scunthorpe steelworks, mills at Teesside, Dalzell and Clydebridge in Scotland, an engineering workshop in Workington and a rail consultancy in York. And, operations in France and Germany.

Having invested £1.2 billion in its UK operations since acquiring Corus in 2007, Tata Steel has been struggling to reap benefits from the huge investment made in the pre-global crisis period. Regarding the status on the long products division, group executive director Koushik Chatterjee told the Business Standard, “We communicate only through disclosure and the update on this will be in the next one, scheduled mid-May.”