Steel crisis: Sajid Javid calls on Tata chief to back sale process

For Sale

The business secretary, Sajid Javid, has said he wants Tata chairman, Cyrus Mistry, to agree a process for selling its UK steel business when they meet in Mumbai on Wednesday.

Javid has hinted at the financial support that ministers are willing to provide to secure a sale of Tata’s British assets, saying he wants potential buyers to understand that the UK government would “have a role”.

Javid also revealed that Liberty House – owned by Sanjeev Gupta – is not the only company to show interest. “It’s great that this interest is out there,” he said.

The government is also thought to have contacted investment firm Greybull and ThyssenKrupp, the German industrial conglomerate.

Around 40,000 jobs are at risk after Tata announced last week it will sell its UK steel business, including the blast furnaces at Port Talbot, the biggest steelworks in the country.

The business secretary insisted that meetings on Tuesday with David Cameron and the Welsh first minister, Carwyn Jones, had been “constructive”.

Javid is holding meetings with the Welsh government, trade unions, and Liberty House before flying to Mumbai to meet Tata.

“I’ve met Liberty before and I’m very happy to meet them again [on Tuesday],” Javid said. “I’m looking forward to that. But it’s right that there is a role here for the UK government and I’ve set out how we can help. There’s a lot of detail there to work out and of course it depends on who the buyer is.

“But the important thing is where the buyers are coming forward we’re ready to work with them.”

The Welsh first minister said his message to Cameron at the meeting, which was also attended by Javid and the UK chancellor, George Osborne, had been: “These plants cannot close.”

He agreed that the meeting was “constructive” and said he and the prime minister had agreed to talk regularly “given the urgency of the situation”.

Jones added: “We know there are potential buyers out there – but there’s still a lot of work to be done. We discussed pension liability, energy costs and tariffs, and I was glad to hear from the prime minister that nothing is off the table.”

Gupta, a metals tycoon, has said he believes he can revive Tata Steel’s UK business without any job losses at Port Talbot.

Gupta said it would take years to make the Tata Steel business viable, but added that his Liberty House company was interested in acquiring the assets, including the Port Talbot site in south Wales, which employs 4,000 workers. Tata’s total UK workforce is 15,000. A further 25,000 work in its supply chain.

Speaking before a meeting with the business secretary, Gupta said the biggest obstacle to reviving the loss-making business was the giant blast furnace at Port Talbot. But he suggested it could be possible to switch to arc furnaces to recycle scrap steel instead of importing raw materials and then exporting scrap.

Asked if he thought the business could be overhauled without job losses, Gupta said: “Yes, absolutely, that would be my intention.”

Liberty House already owns steel plants in the UK, including in south Wales, and has been taking on assets affected by the crisis in the steel industry. It reopened a steel mill in Newport, south Wales, last year after spending two years reviving the site. Last month, Gupta also bought two mills in Scotland that had belonged to Tata Steel.

Gupta told BBC Radio 4’s Today programme that he believed 2,000 of Port Talbot’s workers employed at the blast furnace could be redeployed within the business. He has argued for some time that British steel’s future lies in recycling scrap rather than importing slabs to be melted down.

However, Gupta warned that it was early days and that his company had not had the chance to inspect Tata Steel’s business or talk to the company or the government.

“What anybody looking at this prospect must contend with is: ‘What is the main problem of the viability of this business?’ The main problem we see is the blast furnace, because they are importing all their own materials … It will take years to make this transition from blast furnaces to arc furnaces, but there has to be a long-term plan.”

Gupta said Tata Steel’s pension fund, with 130,000 members and liabilities of almost £15bn, was another obstacle. He declined to say whether Liberty House would buy Tata Steel’s UK business if the pension fund were split off.

“It is certainly an issue that has to be tackled, but for us the focus is the absolute viability of the plant first,” he said.

Powered by Guardian.co.ukThis article was written by Anushka Asthana and Graham Ruddickand Sean Farrell, for theguardian.com on Tuesday 5th April 2016 14.00 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010