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Welsh billionaire Terry Matthews backs Tata Steel UK buyout plan Welsh billionaire Terry Matthews backs Tata Steel UK buyout plan
(35 minutes later)
Sir Terry Matthews, the first Welsh billionaire, is backing a proposed management buyout of Tata Steel UK, boosting hopes of a rescue deal for the Port Talbot steelworks and thousands of employees.Sir Terry Matthews, the first Welsh billionaire, is backing a proposed management buyout of Tata Steel UK, boosting hopes of a rescue deal for the Port Talbot steelworks and thousands of employees.
Matthews is helping to put together a consortium of public and private sector figures from south Wales who can support the buyout. Other figures in the consortium include Simon Gibson, the chief executive of Matthews’s investment vehicle Wesley Clover, and Steve Phillips, the chief executive of the Neath Port Talbot county borough council.Matthews is helping to put together a consortium of public and private sector figures from south Wales who can support the buyout. Other figures in the consortium include Simon Gibson, the chief executive of Matthews’s investment vehicle Wesley Clover, and Steve Phillips, the chief executive of the Neath Port Talbot county borough council.
Phillips said: “We are all likeminded people who believe that the UK steel industry has a future. The MBO [management buyout] deserves the opportunity to be heard.”
Related: Senior Port Talbot staff ‘to announce buyout plan for Tata Steel plant’Related: Senior Port Talbot staff ‘to announce buyout plan for Tata Steel plant’
It is not yet clear whether Matthews is willing to fund a rescue of Port Talbot and Tata’s UK business, or is just helping to drum up support. Matthews is chairman of the Swansea Bay City Region, a partnership between businesses and local authorities. The entrepreneur, now based in Canada, is understood to be flying into the UK today to holds talks. Phillips said: “We are all likeminded people who believe that the UK steel industry has a future. The MBO [management buyout] deserves the opportunity to be heard.”
It is not yet clear whether Matthews is willing to fund a rescue of Port Talbot and Tata’s UK business, or is just helping to drum up support. Matthews is chairman of the Swansea Bay City Region, a partnership between businesses and local authorities. The entrepreneur, now based in Canada, is understood to be flying into the UK to holds talks.
He is the third-richest man in Wales and made his fortune in technology and telecommunications. He has founded or funded more than 100 companies, including Mitel. Matthews also owns the Celtic Manor resort in south Wales and is credited with bringing the Ryder Cup to the country. The golf tournament was held at Celtic Manor in 2010.He is the third-richest man in Wales and made his fortune in technology and telecommunications. He has founded or funded more than 100 companies, including Mitel. Matthews also owns the Celtic Manor resort in south Wales and is credited with bringing the Ryder Cup to the country. The golf tournament was held at Celtic Manor in 2010.
The plan for a management buyout has been drawn up by Stuart Wilkie, the managing director of Tata’s strip products business, which includes Port Talbot. He is understood to have outlined his plans to staff on Tuesday and is now trying to raise the funds to launch a bid.The plan for a management buyout has been drawn up by Stuart Wilkie, the managing director of Tata’s strip products business, which includes Port Talbot. He is understood to have outlined his plans to staff on Tuesday and is now trying to raise the funds to launch a bid.
The news that Matthews is backing Wilkie’s proposals gives the management buyout plan greater credibility. It could be the best hope of securing the future of the Port Talbot steelworks. Sources close to Tata have warned there is a lack of interest in buying its entire UK business, which is losing £1m a day.The news that Matthews is backing Wilkie’s proposals gives the management buyout plan greater credibility. It could be the best hope of securing the future of the Port Talbot steelworks. Sources close to Tata have warned there is a lack of interest in buying its entire UK business, which is losing £1m a day.
Wilkie is reported to have asked staff interested in his plans to contribute up to £10,000 towards funding a deal. Sajid Javid, the business secretary, has said the government was willing to co-invest with a potential buyer, meaning it could support a management buyout.Wilkie is reported to have asked staff interested in his plans to contribute up to £10,000 towards funding a deal. Sajid Javid, the business secretary, has said the government was willing to co-invest with a potential buyer, meaning it could support a management buyout.
A spokesperson for the Department of Business, Innovation and Skills said: “We are doing everything we can to help the steel industry secure a long-term viable future and welcome any interest from potential bidders.”A spokesperson for the Department of Business, Innovation and Skills said: “We are doing everything we can to help the steel industry secure a long-term viable future and welcome any interest from potential bidders.”
Other potential bidders for Tata Steel UK include: Liberty House, Sanjeev Gupta’s metal company; Greybull, the investment firm that is buying Tata’s steelworks in Scunthorpe; and ThyssenKrupp, the German industrial conglomerate.Other potential bidders for Tata Steel UK include: Liberty House, Sanjeev Gupta’s metal company; Greybull, the investment firm that is buying Tata’s steelworks in Scunthorpe; and ThyssenKrupp, the German industrial conglomerate.
Related: How the UK steel crisis unfolded
Trade unions welcomed the news of Wilkie’s interest but said they had yet to be contacted.Trade unions welcomed the news of Wilkie’s interest but said they had yet to be contacted.
A spokesperson for Community, the steelworkers’ union, said: “We welcome interest from all credible potential new owners. We are aware of reports that a management buyout is under consideration and would expect discussions with anyone considering leading such an initiative.A spokesperson for Community, the steelworkers’ union, said: “We welcome interest from all credible potential new owners. We are aware of reports that a management buyout is under consideration and would expect discussions with anyone considering leading such an initiative.
Related: How the UK steel crisis unfolded
“We are still in the very early stages of the sales process; however it is clear that significant interest in the business exists from a number of different potential buyers. This is a sign that a long-term, profitable future for the industry is entirely possible.”“We are still in the very early stages of the sales process; however it is clear that significant interest in the business exists from a number of different potential buyers. This is a sign that a long-term, profitable future for the industry is entirely possible.”
About 40,000 jobs are at risk after Tata announced last month that it would pull out of the UK steel industry. The figure includes 15,000 jobs at Tata and 25,000 in the supply chain.About 40,000 jobs are at risk after Tata announced last month that it would pull out of the UK steel industry. The figure includes 15,000 jobs at Tata and 25,000 in the supply chain.
The management buyout would activate a turnaround plan for Port Talbot, which was presented to Tata’s board last month in a last-ditch attempt to persuade the Indian company to stick with the UK business.The management buyout would activate a turnaround plan for Port Talbot, which was presented to Tata’s board last month in a last-ditch attempt to persuade the Indian company to stick with the UK business.
This plan – known as “the bridge” – involves £100m being injected into the business immediately. It would keep open the blast furnaces at Port Talbot – a key consideration for the government – and take two years to get the business back into profit. This plan – known as “the bridge” – involves £100m being injected into the business immediately. It would keep open the blast furnaces at Port Talbot, a key consideration for the government, and take two years to get the business back into profit.
However, Tata rejected the plan as too risky, and any financial backer for the management buyout would need to support the proposals.However, Tata rejected the plan as too risky, and any financial backer for the management buyout would need to support the proposals.
Tata has approached almost 200 parties about potentially bidding for the business. It has declined to reveal the identity of interested parties, as has the government.Tata has approached almost 200 parties about potentially bidding for the business. It has declined to reveal the identity of interested parties, as has the government.
The Labour MP Stephen Kinnock, whose Aberavon constituency includes the Port Talbot plant, said he had always felt that management buyout was the right option in principle, but said it needed the right team and financial backing to work in practice. Stephen Kinnock, the Labour MP whose Aberavon constituency includes the Port Talbot plant, said he had always felt that management buyout was the right option in principle, but said it needed the right team and financial backing to work in practice.
He said: “That is why the due diligence phase of the sale process will be so important, and why I am very concerned about the tight timeline that Tata Steel has set out. It is vital that Tata Steel delivers on its promise to be a responsible seller and that the government ensures that this is the case.He said: “That is why the due diligence phase of the sale process will be so important, and why I am very concerned about the tight timeline that Tata Steel has set out. It is vital that Tata Steel delivers on its promise to be a responsible seller and that the government ensures that this is the case.
“There are a number of credible buyers in the market, but sustainable success will only be achieved if the government starts to deliver something tangible on dumping, energy, procurement and business rates. Labour MPs have raised these issues 208 times in parliament since the general election, so there can be no more excuses . It is time for the government to act.”“There are a number of credible buyers in the market, but sustainable success will only be achieved if the government starts to deliver something tangible on dumping, energy, procurement and business rates. Labour MPs have raised these issues 208 times in parliament since the general election, so there can be no more excuses . It is time for the government to act.”