Steel crisis: Tata buyout consortium 'confidence' over help

Port Talbot steelworks Image copyright Getty Images

A consortium looking to buy Tata Steel's UK operations says the option of the UK government taking a stake gives them more confidence of success.

Tycoon Sir Terry Matthews was revealed as part of the group which includes Port Talbot plant boss Stuart Wilkie.

It comes as the UK government said it was prepared to take a 25% stake after a takeover.

UK Business Secretary Sajid Javid said it was "clear evidence" of the extent of that commitment.

It is expected to amount to "hundreds of millions of pounds" of commercial loans, according to the prime minister's office.

The Welsh Government was involved in the joint announcement and said it was part of the financial support package.

First Minister Carwyn Jones said: "We're committed to supporting any credible bid to secure steel making in Wales.

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Media captionSir Terry Matthews said it was a good time to invest in steel, with the industry at a low point

"We have worked with the UK government to put in place this significant package of support and we believe that this will help secure a successful sale of Tata Steel's operations in Wales and the rest of the UK."

The consortium also represents workers, managers, customers, Neath Port Talbot council and includes economists along with Sir Terry, who is chairman of Swansea Bay City Region.

It was brought together by businessman Simon Gibson, an associate of Sir Terry, and met for the first time on Monday and again on Thursday.

It is being led by Newport-born Roger Maggs, who has 27 years experience of the metals industry and was recently appointed chairman of the new Port Talbot Waterfront enterprise zone.

He worked for Alcan Aluminium globally and is the founder, along with Sir Terry, of investment firm, Celtic House Venture.

"It's wonderful news and it gives legitimacy to the efforts that other people are making," said Mr Maggs about hearing of the support package.

"It shows someone believes in the idea."

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Media captionConsortium head Roger Maggs believes the original rescue plan for Tata Steel UK is still viable and not 'pie in the sky'

He said he was "just as determined but much more confident".

Mr Maggs told BBC Wales the management's "wide-ranging" rescue plan, which was rejected by Tata in India, was "viable" and he believed it could be delivered by early 2018.

He said there were economic reasons for wanting to save the plant but he also went around the plant on a seven hour tour last week and spoke to workers.

"The feeling I got from everyone - not what I was expecting - it was obsession with what they were doing, they absolutely love their jobs and I think that's another reason to get stuck in," he added.

Sir Terry said it was a strategically important industry and he would potentially look to invest himself if it was needed.

"I'm looking forward to a future which is the next generation steel - lower power, better quality, global market," he said.

The consortium is in the process of going through the numbers and details of a management buy-out.

BBC Wales revealed earlier this week that Mr Wilkie was involved in a management buy-out proposal for the UK operations.

More details are now emerging of those involved in the proposal.

The steel union Community said it would welcome "prompt discussions with Stuart Wilkie and any management buyout option".

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Image caption More than 50 union officials met in Port Talbot to discuss the latest developments

Union officials met in Port Talbot on Thursday afternoon to discuss the development.

Roy Rickhuss, general secretary of the Community union, said it was a positive step and built on constructive talks with Mr Javid and Mr Jones.

"We welcome the willingness of government to support debt financing and that they remain open to taking a 25% share in the business.

Governments must continue to work closely with Community as we do everything we can to secure a future for our steel industry."

On Wednesday, Tata said it had reached out to 190 potential bidders for its Port Talbot site.

A spokesman said: "We are trying to find a responsible buyer. We don't want the process to last forever - our main aim is to find the right buyer."

Tata Steel directly employs 15,000 workers in the UK and supports thousands of others, across plants in Port Talbot, Rotherham, Corby, Shotton and Teesside.

The UK operations are losing about £1m a day, but Tata has not set a deadline for a sale.

Tata is selling its entire loss-making UK business and has asked for expressions of interest as part of the sales negotiations process.

The crisis that has hit the steel industry has been driven by falling prices and a global oversupply.

In the UK, high energy costs and cheaper Chinese imports have exacerbated the issue.

Steel company Liberty House, owned by Sanjeev Gupta, has publicly expressed an interest in buying the Port Talbot works.

Who is Sir Terry Matthews?

  • Born in Newport in June 1943 on the site of the Celtic Manor hotel, when it was a maternity hospital
  • Raised in Newbridge, Caerphilly county
  • Earned an electronics degree at Swansea University
  • Made his fortune in telecommunications
  • Now owns Celtic Manor Resort, which hosted the 2010 Ryder Cup
  • Based in Canada
  • Swansea Bay City Region chairman

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