Friday, August 26, 2016

News: Liberty House linked to South Yorkshire's Tata Steel sites

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The Liberty House Group, one of the bidders for the whole of the Tata Steel UK business, is reported to be in talks to buy Tata Steel's specialities business in South Yorkshire.

Following a board meeting in July, 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 at sites like Aldwarke in Rotherham and Stocksbridge in Sheffield.

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.

Liberty House is an international steel and non-ferrous metals group and has already taken on plants in Newport and Scotland. It also acquired parts of Caparo's advanced engineering products and precision strip businesses in the West Midlands.

Sky News reported that potential bidders for speciality had been told to table indicative proposals by July 15. Now the Economic Times of India is reporting that Liberty is in advanced talks to purchase the pipe business in Hartlepool, and is amongst the bidders for Tata's speciality steel operations in Rotherham and Stocksbridge.

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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.

KPMG, the accountancy firm is running the sale and according to Sky News, 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."

The Economic Times added that Liberty House is said to be the only bidder for the Hartlepool works, which employs 600 people, and that a deal could be concluded in September. Sources say that Liberty House values sites in Rotherham, Stocksbridge and Hartlepool at £100m.

The Government has previously said: "We understand that a number of offers were received for the speciality steel business as part of the sale process for the whole of Tata Steel UK's operations. This indicates there are good prospects for a wholly commercial transaction for both the pipe mills and specialities business, similar to that achieved when the Tata Long Products business was sold to Greybull Capital. Therefore, at this point we do not believe that the specialties business is likely to require the same level of support and investment to secure a sale as the strip business based at Port Talbot."

In May, Liberty announced that it was submitting a bid for the entire share capital of Tata Steel UK. It was being supported by a panel of financial advisers led by international investment bankers, Macquarie Capital (Europe) Limited, with the State Bank of India Capital Markets as co-financial advisers.

Prospective buyer, Sanjeev Gupta, chief executive officer at Liberty House, has outlined the group's strategy. One solution is to use Electric Arc Furnaces (EAF) to make "GREENSTEEL" from the UK's mountain of scrap. It is also looking at investing in low cost long term renewable power, as close to the steel plants as possible. The third element of the strategy is to invest in engineering companies that use the steel and turn it into advanced components for existing and new UK based growth industries.

Neither side is commenting as the sale process continues. Liberty House did say following the halting of the sale by Tata in July that: "In the short term we will continue discussions with Tata about the acquisition of a number of important assets that fit well with our strategy."

Liberty House website

Images: Liberty House


1 comments:

Cllr. Nigel Simpson August 26, 2016 at 11:01 AM  

Congratulations to all the workers and good luck
to the management and owners

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