Entrepreneur voices interest in steel plant
STEEL entrepreneur Sanjeev Gupta said he would look to acquire Port Talbot steelworks if the business was put up for sale.
It comes as Indian-owned Tata Steel UK continues discussions over a bespoke loan, understood to be in the region of £500m, with the UK Treasury to support its loss-making operation in the UK, where it employs 7,000 in Wales and 4,000 at its primary steelmaking plant in Port Talbot.
After weeks of negotiations with the Treasury, Catalan-owned recycled steel business Celsa Steel UK, which employs 800 in south Wales with the majority at its mill in Cardiff, on Thursday secured a repayable of loan of £30m.
As part of the UK Government funding, which is expected to be repaid in full, the company must meet a series of legally-binding conditions.
These include net zero targets, improved corporate governance, such as restraints on executive pay and bonuses, and tax obligations. It has also required further financial commitments from shareholders and existing lenders.
It is the first funding deal of its type with a major employer in the UK deemed of national strategic importance and unable to access the Government’s mainstream Covid-19 loans schemes.
The funding secures more than 1,000 Celsa jobs across the UK. It has also secured additional private funding. Alongside the UK Government, the Welsh Government has provided Celsa with a £2.9m loan and nonrepayable finance of £690,000 from its Economic Resilience Fund.
For Tata, it is a clear indication that the UK and Welsh governments view steel as an industry of national strategic importance.
As well as its Port Talbot plant, its downstream businesses include those at Trostre, Caerphilly, Llanwern and Shotton.
Tata said in a statement: “We have been, and continue to, seek government support in the UK, the Netherlands and all geographies we operate in. It would not be appropriate to comment on ongoing discussions with governments.”
In an interview with Moneycontrol, steel magnate Mr Gupta, who is executive chairman of Liberty Steel Group, said he would consider an acquisition if the Port Talbot steelworks was brought to market.
Liberty Steel, part of the GFG Alliance owned by the Gupta family, was one of a number of bidders for Tata’s UK steel business back in 2016, before the sales process was abandoned.
Tata then pursued a joint venture of its European steel business with German conglomerate Thyssenkrupp, before that was dissolved last year.
Mr Gupta, who lives in Monmouthshire, said of the Tata’s UK business: “If we are offered, we are ready to look at it. We have a strong relationship with the Tata Group and are ready to explore any kind of partnership with them. The question is of Tata’s drive. I am always ready.”
Liberty Steel’s Newport steel operation has recruited leading equipment-provider Danieli to develop its longer-term plans for a “greensteel” hub, where the business already owns and operates a hot-rolled coil mill. The Liberty Steel Newport hub would see investment in Danieli’s latest electric arc furnace technology and other site upgrades to create a cast strip plant capable of producing up to two million tonnes per annum of thin-gauge hot-rolled coil for the UK market.
However, Liberty said this is contingent on what it said was a “competitive investment market” and Simec Atlantis Energy – in which GFG Alliance-owned Simbec Energy has a minority stake – being able to convert the adjacent Uskmouth power station into a biomass plant.
While not able to give figures on the required investment, it said a biomass-powered plant would feed the new development at Liberty Steel Newport with competitive power.
Yesterday, Tata said it has resolved a dispute with steelworkers in Holland. It confirmed an employment pact for employees in the Netherlands will be extended by five years, with no compulsory redundancies from the company’s transformation programme.
Henrik Adam, chief executive of Tata Steel in Europe, said: “This agreement should give our employees the confidence that Tata Steel is fully committed to building a sustainable future for IJmuiden. We share an ambition with our employee representatives to restore IJmuiden’s position as the most competitive steel plant in Europe.”