Ratan-Tata led Tata Steel’s European arm Corus UK Limited (Corus) and Thailand’s largest steelmaker Sahaviriya Steel Industries Public Company Limited (SSI), on Friday signed a memorandum of understanding (MoU) on a potential takeover of Corus’ Teesside Cast Products (TCP) business by the Thai firm for around $500 million (R2,343 crore).
The deal is expected to create a number of new jobs at the plant in addition to TCP’s existing workforce of over 700. The assets covered by the MoU include the Redcar and South Bank coke ovens, TCP’s power generation facilities and sinter plant, the Redcar Blast Furnace and the Lackenby Steelmaking facilities.
Corus said in February that it lost about $233 million (R1,092 crore) running its Teesside plant in northeast England after a consortium of four steel buyers, accounting for about 80 per cent of the plant’s business, reneged last year on a 10-year contract. The plant has been in a state of limbo ever since.
A sale agreement would also result in Corus and SSI operating Redcar Wharf (TCP’s bulk terminal) as a joint venture, giving Corus the flexibility to use Teesside to serve other steelmaking operations, while also meeting SSI’s requirements.
“This is the first step required to reach a definitive sale agreement in the coming months, which should result in the restart of steel making on Teesside in the first half of 2011,” said Kirby Adams, managing director and CEO, Corus.