Wednesday, July 13, 2016

News: Even tighter Tata timeline

By

Tata Steel has asked for offers for its Speciality Steels business to be submitted by the end of the week, according to reports.

Following a board meeting last week, the Indian-owned steelmaker decided on a separate process for the potential sale of its Speciality Steels business, which until recently employed over 2,000 people in South Yorkshire.

The sale process for the rest of the UK assets was halted and the Tata board said it was looking at "alternative and more sustainable portfolio solutions" including a potential joint venture with Germany's Thyssenkrupp which would see the strip products businesses combined.

Speciality Steels is not considered a downstream business linked to Port Talbot and Tata Steel's strip products business. It produces around 225,000 tonnes of steel, comprising around 3% of Tata Steel Europe's total output. It has a £275m turnover and is Tata Steel Europe's only Electric Arc Furnace (EAF) based business, specialising in carbon, alloy and stainless steels for demanding applications like aerospace, motorsports and oil and gas. Until recently it employed over 2,000 people at sites like Aldwarke in Rotherham and Stocksbridge in Sheffield.

Sky News reports that potential bidders have been told to table indicative proposals by July 15.

It adds that the process has been given the codename Project Sabre, and is being run by KPMG, the accountancy firm. Sale documents "forecast a turnaround in the fortunes of the division, with an £81.4m pre-tax loss in the year to March 2016 expected to become a £32.9m profit by the end of its 2018-19 financial year."

Advertisement

Local Rotherham MPs have raised concerns over the sale and urged the Government to do all it can to ensure that Tata is a responsible seller.

In a statement to the house, Sajid Javid, Secretary of State for Business, Innovation and Skills, said that the Government remained committed to ensuring a sustainable future for the business that Tata put up for sale.

Javid said: "Following the referendum on the UK's membership of the EU, and a review of the bids received for Tata Steel UK, the Board of Tata Group announced on Friday 8 July its intention additionally to explore options for retaining ownership of the business with strategic partners, including through a possible joint venture with ThyssenKrupp AG. Discussions are at a preliminary stage.

"Tata has also announced its intention to sell separately its speciality steel business based in Rotherham and Stocksbridge, as well as two mills that produce steel pipes based in in Hartlepool. Around 2,000 of Tata's UK workforce are employed in the businesses that will be sold. None of the businesses that will be sold are supplied with steel from Port Talbot, and are separate business units within the group.

"We will remain in close contact with Tata during the sale process for the speciality steel and pipes business units, and as they develop their plans for the strip products business. The Government's offer of support via an equity stake and/or loans on commercial terms to a future owner of the strip products business, which includes the operations at Port Talbot, remains."

John Healey, whose Wentworth & Dearne constituency includes the Aldwarke plant, has written with dismay and anger to the Secretary of State following his statement highlighting the uncertainty around the sale, accusing the Government of "turning its back on the steelworkers and steel communities of South Yorkshire."

He called for clarity over what support will be offered to the Speciality Steels business given that the statement only mentions a continuing commitment of support for the strip business and Port Talbot.

Rotherham MP, Sarah Champion met with Anna Soubry, Minister of State (Minister for Small Business, Industry and Enterprise) about the sale of Speciality Steel yesterday. Soubry visited Rotherham and Stocksbridge earlier this year and Champion said she: "understands need to get a responsible buyer."

A Westminster debate on the implications for the UK steel industry of the outcome of the EU Referendum is scheduled for today.

Tata Steel website

Images: Tata Steel

0 comments:

Sponsored by:
Members:
Supported by:
More news...

  © Blogger template Newspaper III by Ourblogtemplates.com 2008

Back to TOP