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Tata Steel UK: Liberty House assures no job cuts, Excalibur Steel sees 1,000 pink slips

Both Liberty House and Excalibur Steel submitted 'letters of intent' for Tata Steel UK's assets.

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Two steel companies in the UK are in the race to buy out Tata Steel's UK assets after they were put up for sale as struggling British steel sector was showing no signs of a turnaround despite the Tata Group company pumping billions of rupees into the business over several years.

This week, Sanjeey Gupta's Liberty House, and Excalibur Steel submitted their 'letters of intent' to buy out the UK operations of the Tata Group company.

This was the first concrete move for the deal.

On Friday, a CNBC report says that Sanjeev Gupta assured that no jobs will be cut if the Tata Steel UK deal goes in his company's favour. 

"The number of workers are the same (under our blueprint) so no change is expected in the total number of people," he told CNBC.

This is not the first time that Gupta has said that he is committed to save the thousands of jobs at Tata Steel UK. I'm committed to saving the 4,000-odd jobs at the troubled Tata Steel's Port Talbot plants, he had said earlier.

"If heavy job losses comes out to be the price to pay, we would not be the ones undertaking that exercise. We will undertake this exercise if we can sustain jobs, which we feel is possible at this stage," Gupta had said.

He had said that Port Talbot and its jobs could be saved if the giant blast furnaces were replaced with facilities to process imported slab steel into higher grade product or make steel from scrap metal rather than from iron ore.

Liberty House's business model is based on its 'Greensteel' model and would involve a transition from steelmaking in blast furnaces to recycling steel in electric arc furnaces over time, while ensuring the company continues to meet key customers' quality requirements. Steelmaking would be ultimately powered by renewable energy sources, the company said.

"Liberty believes the UK steel industry can achieve long-term viability if based on an agile, sustainable, non-cyclical model which integrates liquid steel-making from recycling with downstream production and the manufacture of advanced engineering products."

On the other hand, Excalibur Steel said on Friday that they see atleast 1,000 job cuts from the Tata Steel UK workforce if the deal comes through. This is despite the fact that the company noted in a report that Tata Steel UK's losses are now running at about a quarter of last year's levels.

Excalibur Steel's buyout team is expected to meet four banks this week and hopes to securing financing for the deal by next week. 

In his first interview since he took a leave of absence from Tata Steel UK to head the MBO, Excalibur Steel UK CEO Stuart Wilkie said he also sees getting employees to invest around 10,000 pounds each in the business as a "moral element".

"I almost see it as a moral element. If we go to the City (financiers) to ask for tens or hundreds of millions of pounds in finance, as individuals we have to reflect do we back the business we work in? This business going forward has to have the courage and conviction to deliver its own results and its own future," he told 'ITV News'.

(With inputs from agencies)


 

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