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Tata Steel UK bids expected ahead of Mumbai talks Tata Steel UK potential buyers set to put in bids by Monday deadline
(about 9 hours later)
Potential buyers of Tata Steel UK are due to submit firm bids as the business secretary, Sajid Javid, prepares to travel to Mumbai for talks with the firm’s Indian owners. Potential buyers of Tata Steel UK were working to submit firm bids to meet Monday’s deadline as the business secretary, Sajid Javid, prepared to travel to Mumbai for talks with the owners.
Up to seven possible buyers have been working on proposals to buy Britain’s biggest steelmaker, which employs about 12,000 people and includes the blast furnace at Port Talbot in south Wales. Up to seven possible buyers have been working on proposals to buy Britain’s biggest steelmaker, which employs about 12,000 people and includes the blast furnace plant at Port Talbot in south Wales.
Tata, the Indian conglomerate, announced in March that it wanted to sell its UK steel business, which it bought in 2007. The business was losing an estimated £1m a day due to cheap Chinese imports, high business costs and plunging prices. Tata, the Indian conglomerate, announced in March it wanted to sell its UK steel business, which it bought in 2007. The business was losing an estimated £1m a day, undercut by cheap Chinese imports and saddled with high business costs.
Tata said on 9 May it had put seven expressions of interest in the business through to the next stage of the sale process. The potential buyers included Liberty House, the metals group headed by Sanjeev Gupta, and Excalibur Steel UK, a management buyout team. Tata said on 9 May it had put seven expressions of interest in the business through to the next stage of the sale process. The potential buyers included Liberty House, the metals group headed by Sanjeev Gupta, and Excalibur Steel, a management team led by Stuart Wilkie, who runs Tata’s strip products business, which includes Port Talbot.
Excalibur is ready to support Liberty’s bid, according to reports. Excalibur will express support for Liberty’s plan in its bid document and Liberty’s bid will welcome that management team’s backing, Reuters reported. Other potential bidders include Greybull Capital, the investment company that has agreed to buy Tata’s long products business; China’s Hebei Iron and Steel; JSW Steel of India; and Endless, a US private equity fund.
The bid process threatened to become acrimonious as Excalibur denied speculation that Wilkie and other senior team members were ready to join up with Liberty House. An industry source had suggested Excalibur would submit its own offer while informing Tata its team would move over to support Gupta’s bid.
Roger Maggs, Excalibur’s chairman, told the BBC: “The suggestion that Stuart Wilkie is going to join the Liberty Steel bid is completely untrue.” A spokesman added that the same applied to other members of Excalibur’s management team.
Gupta has said he wants to buy the entire Tata Steel UK business but that he would shift Port Talbot away from manufacturing steel from imported raw materials to recycling scrap steel.Gupta has said he wants to buy the entire Tata Steel UK business but that he would shift Port Talbot away from manufacturing steel from imported raw materials to recycling scrap steel.
Tata has said there is no set deadline for firm bids but the company’s board is expected to examine proposals at a meeting on Wednesday. Javid, who failed to travel to India when Tata decided to pull out of the UK, is said to be heading for Mumbai to discuss options to save the business with Tata’s bosses. Liberty House’s plan is said to have evolved to ensure the Port Talbot blast furnaces stay open with capacity expanded to take stripped steel from Liberty’s plants in Newport and Scotland. Sources had suggested Liberty’s change of plan had helped bring the Excalibur team on board with Gupta’s bid.
Liberty House already owns steel plants in the UK, including in south Wales, and has been taking on assets affected by the crisis in the steel 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. Tata’s board is expected to examine proposals at a meeting on Wednesday and to announce a shortlist of bidders on the day, with a slim chance that a single favoured bidder will emerge.
Javid, who failed to travel to India when Tata decided to pull out of the UK, is heading for Mumbai to discuss the sale process and the government’s involvement with the company’s bosses.
The government has offered to back a bid with hundreds of millions of pounds of loans and grants and a possible equity stake. About 40,000 UK jobs are judged to depend on Tata Steel UK, directly and through the supply chain.
Liberty House already owns steel plants in the UK, including in south Wales, and has been taking on assets affected by the crisis in the steel industry. Last year it reopened a steel mill in Newport, south Wales, after spending two years reviving the site. In March, Gupta bought two mills in Scotland that had belonged to Tata Steel.