It would appear that the Government’s offer to take a 25% share in any takeover of Tata Steel’s UK operations is having the desired effect, with a number of new parties interested in taking control of the beleaguered company.
The biggest new name on the list is that of JSW Steel, another Indian steel group. JSW’s capacity is nearly double that of Tata Steel’s Indian operations, making it the second largest steel company in India, behind only the state-owned Steel Authority of India. In recent weeks, it’s been linked with a big for another struggling Indian steel company, Essar Steel, however its expansion drive was recently met with a credit downgrade from Fitch amid concerns over mounting debt for the company.
They’ve now emerged as a late bidder for Tata, along with six other parties that Tata Steel have taken forward to the next stage of the sales process. Its good news for the 11,000 employees of Tata UK operation, who have renewed hope a deal can be completed to keep them in work.
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Other bidders for Tata Steel include the commodities trading groups Liberty House and Greybull. The latter firm recently provisionally agreed to acquire Tata’s Scunthorpe steelworks for a nominal fee of £1, plus all debts that the operation had accrued. Also on the list was a Chinese group and the US steel producer Nucor, according to reports. Nucor are playing coy at present, with a spokeswoman declining to comment but saying “Like most companies, we are always looking for good opportunities.”
She added: “We never limit ourselves when looking at the future, and are constantly evaluating unique market opportunities or product niches. If the right opportunity comes along, it has to fit our long-term growth strategy and provide the right return on the investment of our shareholders’ valuable capital.”
Finally, there’s the management buyout, recently named Excalibur, led by senior managers from Tata Steel UK who had previously put a rescue package to Tata, which was declined by the board in favour of a sale. The remaining bidders were chosen because they intend to purchase Tata’s remaining UK operations outright, rather than piecemeal.
A spokesperson for Tata Steel said: “The board of Tata Steel Europe has announced that seven expressions of interest submitted for Tata Steel’s UK business have been immediately taken forward to the next stage of the sale process. In addition, Tata Steel Europe is clarifying outstanding points with a number of other parties who have submitted an expression of interest.”
Meanwhile, the government are coming under fire for allowing a British military contract for 100 British ‘supertanks’ to be constructed in Spain using Swedish steel. The contract for Ajax tanks was awarded to Spain so that they would be operational for 2017, but that hasn’t been enough to stop calls for a rethink from the Government. A further 500 tanks will be produced in Merthyr Tydfil, in Wales, as part of a projected £4.5 billon program, though no word has been given on the steel that will be used.