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Tata Steel enters negotiations with Liberty

Tata Steel enters negotiations with Liberty

Added to MTDCNC by MTDCNC on 29 November 2016

TATA Steel has signed a letter of intent with the Liberty House Group with the aim of selling its speciality steels business at a cost estimated to be in the region of £100m.

The global steel giant has entered exclusive negotiations with Liberty Steel for the 'potential sale' of the business that employs close to 1700 staff in the UK. Interestingly, the deal doesn't cover the UK's largest steel plant in Port Talbot. The sites that are incorporated in the deal are thought to be a mill in Brinsworth, the Rotherham electric arc steelworks and the steel purifying facility in Stocksbridge. The deal is also expected to cover the Wednesbury plant in the, West Midlands, the service centre in Bolton and three plants in China.

Bimlendra Jha, CEO of Tata Steel UK, said: “The Speciality Steels business is independent of the pan-European strip products supply chain and today’s announcement is in line with the overall restructuring strategy of the UK portfolio. This is an important step forward in seeking a future for Speciality Steels and we have reached this stage thanks to the efforts of employees, trade unions and management. We now look forward to working with Liberty on the due diligence and other work streams so that the sale can be successfully concluded. We will continue to work closely with trade unions and will communicate any material news on this issue to the employees on an ongoing basis.

Bimlendra also added: “We continue to actively seek solutions to the company’s structural challenges and work with all stakeholders. Among those challenges, there is the need to develop a more sustainable business in the UK as well as a self-sustaining future for the British Steel Pension Scheme.”

Tata Steel UK has invested £1.5 billion of capital over the last nine years. The company's boards consider the technical feasibility and economic returns of investments when taking decisions, as well as their affordability. The company is pursuing a transformation plan to create a sustainable future for its UK strip products business. The success of this plan is likely to influence decisions on future investments.

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