Reports several bidders will abandon plans to buy Tata steel UK operations on back of Brexit vote
Sky News are reporting that several bidders for Tata Steel’s British operations are “close to abandoning talks” with the Indian headquartered company owner due to the outcome of the EU referendum.
Billionaire tycoon Wilbur Ross, is among seven bidders shortlisted for Tata Steel’s UK business, has signalled that exiting the EU would diminish the prospects of him pursuing a takeover.
Sky say “a number of other prospective buyers are understood to have similar concerns about the potential impact of Brexit on global demand for steel, the robustness of new trade deals negotiated by the Government, and the ability to sell steel produced in the UK in the European single market.”
Tata Steel has been consulting on plans to withdraw from the UK, but a sell-off of its business has been hampered by the British Steel pension scheme which has a £485m black hole.
To save thousands of jobs, the Government has drawn up proposals to separate the scheme to make the sale of Tata’s assets more appealing.
Dodgy sales process
Prior to Thursday’s EU vote, steelworkers’ union, Community said it has serious concerns about the integrity of Tata Steel’s sales process.
Daily ‘insider’ reports which have been plotting the latest twists from the company’s sales team camp are now pointing towards a possible break up of the UK estate.
It’s almost three months since workers in Shotton and around the UK were told Tata intended to sell it’s UK assets
Reports had been swirling around various media outlets last suggesting Tata now will abandon a previous promise to keep the whole of its UK business as a single operation.
The company is now considering bids for parts of the business, something it initially rejected further to the confusion.
It’s reported Tata’s Indian parent company was also said to be considering accepting government support and scrapping the sale altogether.
Sky News reported “documents relating to the sale of Tata’s speciality steels division and its pipeline tube operations… will be issued to potential bidders in the coming days”.
The sales would involve breaking up Tata’s UK operations, which several analysts believe will yield a greater overall value as separate businesses.
Speciality steels and pipeline tube operations have been chosen because “they are separable from the main Tata Steel supply chain”.
Shotton insiders have already told Deeside.com no announcement on the future of the plant and the rest of the UK operations would be announced before Thursday’s vote.
Those ‘in the know’ are pointing to a deal which would see Tata retain some or all of it’s UK estate with Government commercial loans and pension support the most likely, and welcome outcome.
Tata could of course still get ‘cold feet’ on the back of the countries decision to exit the EU.
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