Tata Steel will launch the formal sale process for its British assets by Monday (April 11) at the latest, Britain’s business secretary Sajid Javid said after a meeting with the company’s chairman Cyrus Mistry in Mumbai on Wednesday.
“They’ve said that they intend to launch formally the sales process by Monday at the latest,” Javid said. “I’ve also made it clear that the UK government will do everything it can to support any serious buyer in every way we can to secure the long term future of this industry.”
No timeframe was yet decided to complete the sale process and Tatas will allow “a reasonable period to find a buyer,” Javid added.
“Today’s meeting is the follow-up of what we have announced on March 29,” a Tata Steel spokesperson said.
Senior officials of Tata Steel led by Mistry have told Javid that the company will conduct the entire sell-off process in a smooth and transparent manner, with minimum loss of jobs, people familiar with the matter said.
Javid also said a number of parties, including Liberty Steel, have come forward, but did not share further details.
Industry circles described the meeting as unprecedented with a minister flying in to meet officials of a private company.
The meeting came a day after Javid met officials of Tata Steel, who were present in London, as part of the sale process that was announced on March 30.
In its previous statement, Tata Steel had said that the company has been in “deep engagement with the UK government seeking its support to achieve the best possible outcome for the UK business. These discussions are ongoing and will continue.”
On March 30, Tata Steel said it has advised the board of its European holding company to “explore all options for portfolio restructuring, including the potential divestment of Tata Steel UK, in whole or in parts. Given the severity of the funding requirement in the foreseeable future, the Tata Steel Europe Board will be advised to evaluate and implement the most-feasible option in a time-bound manner.”
According to sources, Tata Steel had been looking at all options over the past five years when it became clear that the UK operations were not viable, even after the group extended financial support to the business and suffered asset impairment of over £2 billion. The company was losing £1 million a day for running the Port Talbot site, the largest among its steel plants in Britain.
“It will be difficult to retain all 40,000 jobs. The group will probably be able to keep jobs connected to the downstream business, because usage of steel is not going to stop. What will be difficult is sustaining the prime steelmaking facilities,” one person familiar with the talks said.
Global steel demand, especially in developed markets such as Europe, has remained muted following the Lehman financial crisis in 2008.
(With inputs from agencies)