Friday, May 6, 2016

News: Concerns over tight Tata timetable

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Concerns have been raised about the amount of time that Tata Steel is allowing to sell its remaining UK assets.

The Indian-owned steelmaker concluded that it is exploring all options for portfolio restructuring including the potential sale of Tata Steel UK, in whole or in parts. The formal process began on April 11 with contact made with 190 potential financial and industrial investors worldwide. Two bids have so far been made public, from Liberty House and Excalibur Steel.

MPs close to the deal believe that Tata Steel has indicated that it wishes to complete the sale of its UK assets by the middle of June.

When asked about the timescale by Aberavon MP Stephen Kinnock in Parliament this week, Prime Minister David Cameron said: "The positive news is that the deadline yesterday was met by a number of serious inquiries of interest into buying all of Tata, and that is good news. Obviously, we now need to work intensively with Tata and those buyers to get that list down to those who seriously intend to bid for the business.

"The hon. Gentleman is right that it is a very short timetable. He asks what we are doing, and what we are doing is talking intensively with Tata to ensure that it does everything it can to make sure that this is a serious sales process."

The Government has said that it would be willing to offer a package of support worth hundreds of millions of pounds on commercial terms to potential buyers.

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Bimlendra Jha, CEO of Tata Steel UK told the Department for Business, Innovation and Skills (BIS) Committee recently that "being accused of accelerating the timeframe is misplaced" and that there was no "ultimate timeline" for the sale. Tata Steel Europe said that it is committed to seeking all credible options in an urgent manner and wants to see a sale happen quickly in order to stem losses and remove uncertainty for employers, suppliers, customers and shareholders.

Roy Rickhuss, General Secretary of the steelworkers' union, Community, who was back at Tata's South Yorkshire sites this week, said: "We have serious concerns that Tata Steel will not keep its commitment to be a responsible seller and will impose an arbitrary deadline that is too soon for credible investors to develop a viable bid.

"Since Tata put the business up for sale we have had various discussions with a range of stakeholders who are keen to understand the perspective of the workforce. A number of the people we're talking to have expressed concerns about the tight timescales that Tata wants to impose.

"These are national industrial assets that are up for sale so this isn't something that can happen overnight. Tata allowed time for the sale of its Long Products business to a credible investor, it should provide the same opportunity to bidders for the rest of its UK business. Nobody wants this process to drag on, not least because of the uncertainty for everyone involved with the company, especially the workforce. But nor should this process be rushed when there are so many things at stake, including Tata's reputation as a responsible company."

It is being reported that 65 expressions of interest for all or parts of the business have been submitted. It is also being reported that the sale is to be pushed back until after the EU referendum on June 23.

Tata Steel website

Images: Tata Steel

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