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Tata Steel: Liberty House confirms bid for UK assets Tata Steel: Liberty House will submit bid today
(about 3 hours later)
Liberty House has confirmed it will put in a formal bid to buy Tata Steel’s UK assets. Liberty House, the global metals group, said it will submit an indicative bid to buy Tata Steel’s UK assets on Tuesday.
The commodities trading firm, headed by Sanjeev Gupta, was first to express an interest after the Indian conglomerate announced the shock decision to dispose of its loss-making UK business, including the country’s biggest steel plant at Port Talbot in south Wales. The company, headed by Sanjeev Gupta, said it would send a letter of intent to Tata and had put together an internal transaction team and a group of external advisers to take the bid forward.
A spokesman said Liberty was planning to submit a letter of intent to Tata and had put together an internal transaction team and team of external advisers to take the bid forward. The commodities trading firm was first to express an interest after Tata announced in late March that it would dispose of its loss-making UK business, including the country’s biggest steel plant at Port Talbot in south Wales.
A management buyout team is also planning to submit a bid under the name Excalibur Steel UK Limited. A Liberty House spokesman said: “Liberty will submit a letter of intent to Tata Steel today (Tuesday) and has put in place a strong internal transaction steering committee and panel of leading external advisers to take the bid forward. We hope to make a further short statement later today.”
It has appointed investment banker Mark Rhydderch-Roberts as a non-executive director. Gupta has said if he bids for Tata Steel’s UK business he could do so without cutting jobs at Port Talbot, which employs about 4,000 people. But he said it would take years to turn around the business and that Port Talbot’s giant steelmaking blast furnace would be replaced by electric arc furnaces designed to recycle scrap steel.
He joins Stuart Wilkie, the head of Tata’s United Kingdom strip steel business, former Alcan senior executive and venture capitalist Roger Maggs, Simon Gibson, chief executive officer of Wesley Clover and company secretary Jon Fernandez Lewis in the board. Liberty House employs about 1,500 people in the UK where it already owns steel plants and has been taking on assets affected by the crisis in the industry. It reopened a steel mill in Newport, south Wales, last year after spending two years reviving the site. In March, Gupta bought two mills in Scotland that had belonged to Tata Steel.
The government has pledged to support any buyer of the business by buying up to a quarter stake and making hundreds of millions of pounds of finance available. A management buyout team also intends to lodge a bid under the name Excalibur Steel UK Limited. Excalibur is led by Stuart Wilkie, the head of Tata’s British strip steel business.
Tata has not publicly set a deadline for any deal but has made it clear it cannot sustain the £1m a day losses indefinitely. Liberty House and Excalibur appear to be the only two credible interested parties in Tata Steel UK, which employs 15,000 people. The government has pledged to support any buyer with hundreds of millions of pounds, including taking a possible stake of up to 25%.
Tata, the Indian conglomerate, has not set a strict deadline for selling the business but it has indicated it will not continue to support the loss-making operation for long. It asked for potential bidders to submit indicative bids this week.