Friday, April 22, 2016

News: Interest in Rotherham steel plant

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Reported interest from potential buyers of Tata Steel's Speciality Steels business has come as no surprise to people in the region who understand the viability of the high quality operations in Rotherham and Stocksbridge.

The Indian-owned steelmaker recently concluded that it is exploring all options for portfolio restructuring including the potential sale of Tata Steel UK, in whole or in parts. As the Government makes efforts to help create a long term future for UK steel, Anna Soubry MP visited Aldwarke in Rotherham following the announcement and left knowing that there is a future for steelworks in South Yorkshire.

With the sale process underway, reports have followed that Liberty House - who took on assets in Scotland and Wales, Greybull - who took on assets in Scunthorpe, and a team led by managers in Port Talbot are interested in parts of the Tata Steel UK business. It was reported that German giant, ThyssenKrupp had previously held high level talks with Tata regarding a European steel joint venture.

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Speciality Steels produces around 225,000 tonnes of steel, comprising around 3% of Tata Steel Europe's total output, and £275m of turnover. It is Tata Steel Europe's only Electric Arc Furnace based business and specialises in carbon, alloy and stainless steels for demanding applications like aerospace, motorsports and oil and gas.

Rotherham MP Sarah Champion reported this week on rumours of three expressions of interests regarding Tata Steel in Rotherham.


Tata Steel said in a statement: "Tata Steel welcomes credible expressions of interest for Tata Steel UK's operations. It is our policy that we are not naming, confirming or commenting on any potentially interested investor or bidder at this point. All expressions of interest, including any Management Buy Out proposals, will be considered when received.

"In the interests of all stakeholders, every credible expressions of interest will enter the same rigorous assessment process to ensure the best value and prospects of sustainability."

Wentworth and Dearne MP John Healey told the Yorkshire Post: "The offers on the table for Rotherham and Stocksbridge have come as no surprise to people in the region given the high quality of South Yorkshire speciality steel.

"What we need to see now from Government is swift action to ensure that UK steel gets the long-term investment needed to protect jobs and communities."

The Government confirmed that a package of support worth hundreds of millions of pounds will be made available on commercial terms to potential buyers of Tata Steel UK.

Tailored to the purchaser's strategy and financing needs, it is expected that all, or the large majority of a support, will be through the provision of debt financing. Other options include providing hybrid (convertible debt) or alternative forms of financing or supporting a purchaser's financing by taking a minority equity stake (up to 25%) acting in support of the purchaser.

Business Secretary Sajid Javid said: "This Government is committed to supporting the steel industry to secure a long-term viable future and we are working closely with Tata Steel UK on its process to find a credible buyer. The detail of our commercial funding offer is clear evidence of the extent of that commitment.

"Ministers have visited Tata Steel sites across the country and the pride and dedication of the highly-skilled men and women working there is obvious to see. We have already delivered on energy compensation, on tackling unfair trading practices and on procurement of British steel, and we will keep on going further to support this vital industry."

Tata Steel Europe website

Images: Rotherham Labour

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