Port Talbot Management Plans Tata Plant Buyout
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.