Port Tal­bot Man­age­ment Plans Tata Plant Buy­out

The Economic Times - - Front Page - Our Bureau

Mum­bai: Top man­agers of Tata Steel’s Port Tal­bot plant, led by its man­ag­ing di­rec­tor Stu­art Wilkie, are look­ing to buy out the loss-mak­ing plant with the help of pri­vate in­vestors and govern­ment sup­port, the Guardian re­ported.

Wilkie, man­ag­ing di­rec­tor of Tata Strip Prod­ucts UK, was named the leader of a group of man­agers scout­ing for in­vestors and seek­ing govern­ment sup­port to save the plant, and are sup­posed to come out with a plan late Wed­nes­day.

Un­der the plan, em­ploy­ees may be asked to in­vest up to £10,000 each, the news­pa­per said. A man­age­ment buy­out is a trans­ac­tion where a com­pany’s man­age­ment team buys the as­sets and oper­a­tions of the busi­ness they man­age.

Tata Steel said in an email re­sponse that the com­pany is not pub­licly nam­ing or con­firm­ing any po­ten­tially in­ter­ested in­vestors or bid­ders. It, how­ever, put out a state­ment on BSE. “All ex­pres­sions of in­ter­est, in­clud­ing any man­age­ment buy­out pro­pos­als, will be con­sid­ered when re­ceived,” it said.

Un­til now, only San­jeev Gupta’s Lib­erty House has showed in­ter­est in buy­ing the plant

“In the in­ter­ests of all stake­hold­ers, ev­ery cred­i­ble ex­pres­sion of in­ter­est will en­ter the same rig­or­ous as­sess­ment process to en­sure the best value and prospects of sus­tain­abil­ity,” the state­ment said. The steel maker’s shares rose 6.52% to close at .₹ 356.85 on the BSE on Wed­nes­day.

Wilkie’s plan for a turn­around of Port Tal­bot was re­jected by the Tata Steel board be­fore putting the busi­ness up for sale. The board had termed the plan un­af­ford­able and un­der­ly­ing as­sump­tions risky. Port Tal­bot is Tata Steel’s largest plant in the UK with a work­force of more than 4,000. Un­til now, only In­dian-born San­jeev Gupta’s Lib­erty House has showed in­ter­est in buy­ing the plant.

“We wel­come in­ter­est from all cred­i­ble po­ten­tial new own­ers. We are aware of re­ports that a man­age­ment buy­out is un­der con­sid­er­a­tion and would ex­pect dis­cus­sions with any­one con­sid­er­ing lead­ing such an ini­tia­tive,” said a spokesper­son for Com­mu­nity, the steel­work­ers’ union.

On April 11, Tata Steel started the sale process of its en­tire UK oper­a­tions, giv­ing up on ef­forts to re­vive the busi­ness it bought as part of the takeover of Corus at the peak of the com­mod­ity boom in 2007. The com­pany has suf­fered al­most a decade of losses amid poor de­mand and cheap Chi­nese im­ports. It reached out to 190 po­ten­tial fi­nan­cial and in­dus­trial in­vestors for the sale.

Tata Steel sold its long prod­ucts busi­ness to Grey­bull Cap­i­tal last week for 1 pound, a move that will re­duce daily cash burn, but not debt on the books. It is now left with the strip busi­ness in Port Tal­bot and re­lated rolling mills.

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