Business Secretary holds meeting with potential buyer for Tata Steel UK
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BY Itrat Bashir
India’s Tata Steel has caused a huge stir after announcing its decision of selling its operations in the UK and Business Secretary Sajid Javid is running from pillar to post to salvage the situation.
In his latest efforts, the British Secretary held a meeting with the Liberty House Group, an international steel and non-ferrous metals group, with a hope of saving thousands of jobs. Liberty House Group has emerged as a potential buyer of Tata’s troubled UK steel business, which is in the loss due to falling steel prices and decreasing demand in key markets.
Sanjeev Gupta, Executive Chairman of Liberty House Group, in his statement on Tuesday said that he had a positive meeting with the government: “The UK government appears highly supportive and is proactively engaged in finding a long-term solution. We have also actively engaged with Welsh government and again we are encouraged by their approach.
According to him, the next step is for Tata to define the formal sales process and request indications of interest from potential buyers. They await further details on this and then will assess their own next step.
He showed confidence of running such venture by saying that “Liberty has already proven its ability to build value from UK steel assets with our acquisition of our Newport Steel plant, Midlands engineering operations and most recently in Scotland where we acquired mills from TATA”.
“Everyone is very motivated to find a solution,” he added.
Finding no rest after the meeting, the Business Secretary will fly to Mumbai, India, on Tuesday for a meeting with Tata Group Chairman Cyrus Mistry, scheduled for April 6, for an update on the sale process of Tata Steel’s UK operations.
What has caused the restlessness in the government? In the recent meeting of the Tata Steel Board, it concluded that its operation in the UK was making a huge loss and it is no longer a sustainable venture. Tata Steel UK is making £1 million loss per day and hence the board has advised “the board of its European holding company (Tata Steel Europe) to explore all options for portfolio restructuring, including the potential divestment of Tata Steel UK, in whole or in parts”.
When Asian Sunday contacted the Tata Steel UK, they said they are committed to running a meaningful process to explore strategic alternatives for Tata Steel’s UK business. “This could include finding one or more buyers for our UK operations,”
To a question, Tata’s spokesperson said the sale process began on March 30th and although there is no fixed timeline, it needs to be implemented urgently to avoid a long period of uncertainty for employees and customers. “Tata Steel Europe is in the process of finalising the appointment of advisers and will soon launch a process globally of seeking an investor for the UK operations,” he added.
According to him, Tata Steel has been operating, supporting and investing as a responsible company in the UK and will explore all credible options to find a buyer for our UK operations. At the same time, as a publicly listed company it has responsibilities to a wide range of people, including tens of thousands of employees around the world and many local communities. Despite very difficult and challenging trading conditions, Tata Steel has invested £1.5bn in its UK operations, supported the UK operations with significant working capital requirements and suffered £2 billion of impairment charges in support of its UK business thus far.
“We will continue our discussions with the government and other stakeholders as we seek its support to achieve the best possible outcome in the circumstances for the UK business and we will continue discussions with Greybull Capital in relation to the potential sale of our UK Long Products business,” he added.
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