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Date set for South Wales-based firm to be sold!

The following article has been extracted from Wales Online:

Tata is reported to have extended its sale deadline to give the Government more time to find a buyer.

Tata is reported to have extended its deadline for the sale of its UK business to May 28.

And the new 11-week timescale – which is more generous than the four to six weeks initially urged by the Government – could be further extended into June as gesture of goodwill, the Financial Times reported.

The paper referred to sources “familiar with the situation” in reporting the end of May date.

Publicly, Tata says there is no deadline for completion of the sale. On Monday group executive director of Tata Steel Koushik Chatterjee refused to give any dates, simply repeating that the sale would be conducted in a “time-bound and credible manner”.

The extension to the sale process, if such it is, is probably explained by the company wishing to the Government more time to find a buyer and work out a package of support to facilitate a sale.

Tata is thought to want to avoid the bad press from having to sell its remaining UK plants, including Port Talbot, Shotton, Llanwern and Trostre, with the loss of 15,000 jobs.

This week the company announced the sale of its Scunthorpe steel works after a lengthy process that began last autumn. The sale is not expected to be completed for another two months.

The formal sale process for the remaining plants began on Monday, and bidders are expected to submit letters of intent by the end of this month. Tata has already received expressions of interest from a number of potential buyers, the Financial Times reported.

However, the paper adds that there is pessimism within the business that a credible buyer will be found.

Sanjeev Gupta’s Liberty Steel is the only prospective buyer to have publicly expressed interest, but the Financial Times cites scepticism among “political and industry figures” about whether Liberty has the financial muscle to take on the whole enterprise.

Meanwhile, there continues to be uncertainty about the nature and extent of the Government’s support for a buyer through co-investment.

Business Secretary Sajid Javid refused to say whether such support would be in the form of an equity investment or a loan, but it is thought an equity stake could run the risk of breaching European state aid rules.

Instead a low interest loan of up to £200m might be more likely.

Source: http://www.walesonline.co.uk/business/business-news/tata-sets-new-date-28-11178468

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