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Tata Steel: Liberty House to submit bid Tata Steel: Liberty House to submit bid
(about 5 hours later)
Liberty House, the global metals group, said it will submit an indicative bid to buy Tata Steel’s UK assets on Tuesday. Liberty House, the global metals group, will make an indicative bid to buy Tata Steel’s UK assets to turn the business into a giant steel recycling operation.
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. The company, headed by Sanjeev Gupta, said it had sent 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.
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. Liberty House will submit its bid after Sajid Javid, the business secretary, cancelled a trade trip to Iran planned for later this month when decisions are likely to be made over the future of Tata Steel.
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.” Javid was embarrassed in March when he was in Australia as Tata announced its decision to sell the UK business – a move unions had warned was on the cards. Javid has since offered government backing to viable offers that save 15,000 jobs at the business.
A spokesman for Javid’s department said: “Given the business secretary’s focus on the steel industry, he has decided to postpone his trip to Iran. He remains committed to exploring the opportunities for trade and investment with this emerging market.”
The trip would have been the biggest trade delegation to Iran since international sanctions were lifted in January.
Liberty House was first to express an interest after the Indian conglomerate 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 Liberty House spokesman said: “Liberty will submit a letter of intent to Tata Steel [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.”
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.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.
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. 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 once belonged to Tata Steel.
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. A management buyout team also intends to lodge a bid under the name Excalibur Steel UK Limited. Excalibur, led by Stuart Wilkie, the head of Tata’s British strip steel business, has received support from the Welsh government.
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%. The Welsh first minister, Carwyn Jones, said he welcomed a “sustainable worker buyout” and that the government in Cardiff had made cash available for Excalibur to assemble its bid.
“This will enable them to buy specialist advice, technical support and pay the salaries of the team while the sales process progresses,” he said, according to Sky News.
Liberty House and Excalibur appear to be the only two credible interested parties in Tata Steel UK. 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.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.
Roy Rickhuss, general secretary of the Community steelworkers’ union, said Liberty’s interest in Tata Steel was a good sign but that there was still a long way to go in the sale process.
“The fact that there are a number of parties interested in buying the business is welcome and shows that investors believe that UK steelmaking can be successful. We would expect all potential investors who come forward to meet with Community so we can understand their plans for the business and ensure they have the capability and capacity to create a sustainable future for UK steel making.”