Seven firms are weighing up bids for Tata Steel’s entire UK business, the company has revealed, raising hopes of a rescue deal that could save up to 12,000 jobs.
Indian conglomerate Tata has been seeking a buyer since it said in March that a turnaround plan for its Port Talbot steelworks was “unaffordable”.
Tata Steel UK received letters of intent from potential bidders last week and said on Monday that seven “have been immediately taken forward to the next stage of the sale process”.
They include Liberty House, which bought two Scottish steel mills formerly owned by Tata last month, and Excalibur UK, a management buyout led by Port Talbot boss Stuart Wilkie.
German steel-making group ThyssenKrupp and investment firm Greybull Capital, which recently bought Tata’s long products business including its Scunthorpe operation, are also understood to be among the interested parties.
Tata rejected offers from firms looking to cherrypick parts of the UK operation, adding that such bidders had been “thanked for their participation in the process but informed that their expressions would not be taken forward currently”.
Instead it will focus on offers for all of Tata Steel UK, which employs around 12,000 people in Britain when stripping out the part of the business already sold to Greybull.
The firms still in the frame are now to be given access to more information about the Tata Steel UK, which has blamed its struggles on the strong pound, cheap steel imports from China, high energy costs and business rates.
Tata said the next stage of the sale process, set to include presentations by senior management, would help bidders “rapidly progress their interest to a binding stage”.
Koushik Chatterjee, finance director of Tata Steel, said the seven firms had been chosen via a “robust initial assessment process with inputs received from the UK government whose views have been considered by the board”.
The government has been directly involved in the talks after the business secretary, Sajid Javid, said hundreds of millions of pounds in financial backingwould be available “on commercial terms” to potential buyers.
Chatterjee said: “The sales process will continue as announced earlier in an expedited and robust manner to deliver greater clarity for all key stakeholders such as employees, customers and suppliers.”