Tata Steel UK staff to bid for Welsh business
Tata Steel UK’s senior staff are believed to be finalising plans to bid for a management buyout of the Indian group’s troubled Welsh steelworks. Stuart Wilkie, managing director of Tata Strip Products UK, is heading the buyout team which is on the hunt for private investors and government support for an official bid for the Port Talbot plant, which employs around 4,000 people. The team’s rescue plan reportedly centres around keeping the blast furnaces going, in contrast to a plan drafted by Indian-origin tycoon Sanjeev Gupta who is working on a bid for the unit by his Liberty House group.
According to UK media reports, Wilkie’s bid is based on a “turnaround plan” presented to and rejected by the Tata Board in Mumbai earlier this year. That plan will require a cash injection of around 100 million pounds and could involve Tata employees investing in the business. Steel union Community said it was open to “discussions” with Wilkie and any management buyout option. The option has support among a section of workers and others campaigning to save thousands of jobs.
Tata has already sold its Long Products Europe business at the Scunthorpe plant to Greybull Capital, which is also eyeing other units of the group s UK business such as Tata’s specialty steels arm based in Sheffield, northern England. Tata Steel employs nearly 15,000 people in the UK at its plants across Port Talbot, Rotherham, Corby and Shotton. The company decided to exit its UK business last month after suffering losses of up to 1 million pounds a day, largely due to Chinese steel exports forcing down prices in the steel market.
The UK government has been holding talks to find a solution and has indicated the possibility of co-investing with potential buyers, side-stepping calls to fully nationalise the steel industry. The Tata Group has set a May 28 deadline to find buyers and has said over 190 potential investors have been approached about purchasing the business but kept the details confidential. Earlier this week, it had announced the appointment of Standard Chartered bank as an additional adviser to run and manage the global sale process, to work alongside KPMG LLP.