Consortium interested in buying Corus’ Teesside plant

Thursday, 18 February 2010 16:49:19 (GMT+2)

UK Prime Minister Gordon Brown has confirmed that potential buyers are interested in saving the northern England-based Teesside steel plant owned by Indian steel giant Tata Steel's subsidiary Corus, according to UK press reports.

Earlier in the week, Middlesbrough mayor Ray Mallon said that he and Middlesbrough Football Club chairman Steve Gibson were both approached by a "credible" consortium interested in buying the plant that will start mothballing on Friday.

Prime Minister Brown, due to to meet his ministers on February 18 for the first cabinet meeting in the northeast of England, said that a number of companies had expressed an interest but any deal would be too late to prevent mothballing of the plant by Indian owners Tata Steel.

Business secretary Peter Mandelson visited the plant before the cabinet meeting, trying to convince management to keep it open and consider offers. His deputy Pat McFadden, meanwhile, is in India and is expected to hold talks with executives from Tata Steel.

As SteelOrbis previously reported, the decision to mothball the plant, which has around 1,600 employees, follows efforts by Corus over eight months to secure a long-term future for the plant after the failure of four international slab buyers to fulfill their obligations under a 10-year contract that they signed with Corus in 2004. This contract committed the consortium in question to buying about 80 percent of the plant's production for ten years.

The global financial crisis caused a huge decrease in production at Anglo-Dutch steelmaker Corus, which was bought by Tata Steel in 2007. Tata Group has found it difficult to run a 3 million mt capacity steel plant without any customers or without a long-term strategic partner, the company has stated at various times.
 

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