UK has signed a letter of intent (LoI) with Liberty House
Group to enter into exclusive negotiations for the potential sale of its speciality steels
business for an enterprise value of £ 100 million subject to due diligence and corporate approvals.
The LoT covers several South Yorkshire-based assets including the Rotherham electric arc steelworks, the steel
purifying facility in Stocksbridge and a mill in Brinsworth as well as service centres in Bolton and Wednesbury, UK, and in Suzhou and Xi’an, China. Speciality steels
business, which employs about 1,700 people, produces steels for the aerospace, automotive
and the oil & gas industries.
“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,” said Bimlendra Jha, CEO of Tata Steel
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
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.
In the current year, the company is pursuing £ 85 million worth of capital investments covering a range of sustenance and improvement schemes. Tata Steel
has recently approved schemes focused on improving manufacturing capability to enable the production of premium steels in Shotton, Llanwern, Trostre, Orb in Newport, and other downstream operations as well as environmental schemes for Port Talbot's power plant. Investments in packaging steels, electrical steels, an automotive
finishing line, laser welding and next-generation coated products are in line with the company’s strategy to enhance the premium product focus for its UK strip products supply chain.