Metals Trading Firm Expands Steelmaking Holdings
03/24/2016 - Tata Steel has reached an agreement to sell two affiliated plate facilities in Scotland, the company has announced.
Tata said it will sell its Dalzell plate mill and the associated Clydebridge quench-and-temper processing plant to the Scottish government, which will then immediately resell the facilities to metals trading firm Liberty House.
Tata had idled the two facilities last year as part of a larger cost-cutting effort, but agreed to maintain them in the hope that they might be restarted, the company said.
“We welcome this deal, which opens the possibility of a resumption of steel processing in Scotland. This has been achieved with the determination and support of employees, trade unions and the Scottish government all working together,” said Bimlendra Jha, executive chairman of Tata Steel’s European long products business, in a statement.
The Guardian newspaper reported that the sale was structured to avoid the lengthy due diligence process required for a transaction between two companies. The Guardian also said that sale might be for as little as one pound because Liberty House will take on environmental liabilities and invest in the plants.
Liberty House founder Sanjeev Gupta has said he wants to rebuild the U.K.’s steel industry and that acquisition of the two plants would be his starting point.
“This agreement saves two great facilities in Scotland,” he said, according to the Belfast Telegraph.
“Clydebridge and Dalzell will fit well into our vision for an integrated, flexible and sustainable steel sector, from recycled local scrap using renewable energy making green steel, to value-added downstream and engineered products.”
Liberty House last year restarted rolling operations at a mothballed mill in Wales and has plans to reopen its meltshop.
Tata Steel Europe is continuing to negotiate a sale of its long products business to private investment firm Graybull Capital.
Tata had idled the two facilities last year as part of a larger cost-cutting effort, but agreed to maintain them in the hope that they might be restarted, the company said.
“We welcome this deal, which opens the possibility of a resumption of steel processing in Scotland. This has been achieved with the determination and support of employees, trade unions and the Scottish government all working together,” said Bimlendra Jha, executive chairman of Tata Steel’s European long products business, in a statement.
The Guardian newspaper reported that the sale was structured to avoid the lengthy due diligence process required for a transaction between two companies. The Guardian also said that sale might be for as little as one pound because Liberty House will take on environmental liabilities and invest in the plants.
Liberty House founder Sanjeev Gupta has said he wants to rebuild the U.K.’s steel industry and that acquisition of the two plants would be his starting point.
“This agreement saves two great facilities in Scotland,” he said, according to the Belfast Telegraph.
“Clydebridge and Dalzell will fit well into our vision for an integrated, flexible and sustainable steel sector, from recycled local scrap using renewable energy making green steel, to value-added downstream and engineered products.”
Liberty House last year restarted rolling operations at a mothballed mill in Wales and has plans to reopen its meltshop.
Tata Steel Europe is continuing to negotiate a sale of its long products business to private investment firm Graybull Capital.
