On August 27, Indian steel giant Tata Steel's subsidiary Corus UK Limited (Corus) and Thailand's largest steel producer Sahaviriya Steel Industries Public Company Limited (SSI) signed a memorandum of understanding (MoU) for the potential sale of Corus' Teesside Cast Products (TCP) to SSI at a price of approximately US$500 million.
The deal, if successfully concluded, is expected to create a significant number of new jobs at the plant in addition to TCP's existing workforce of over 700 and will provide a considerable boost to the local economy, a Corus statement said.
The assets covered include the Redcar and South Bank coke ovens, TCP's power generation facilities and sinter plant, the Redcar blast furnace and the Lackenby steelmaking facilities.
A sale agreement would also result in Corus and SSI operating Redcar Wharf, TCP's bulk terminal, as a joint venture, giving Corus the flexibility to use Teesside to serve its other steelmaking operations, while also meeting SSI's requirements on Teesside.
Corus MD and CEO Kirby Adams said: "This is the first of several steps required to reach a definitive sale agreement in the coming months which should result in the restart of steelmaking on Teesside in the first half of 2011."
Win Viriyaprapaikit, president of SSI, said: "This transaction will enable SSI to fulfill its long-standing objective of becoming a fully integrated steel producer with both primary steelmaking and rolling facilities."
Corus and SSI will continue their negotiations, as well as holding talks with trade unions and the government in the coming weeks and months with the aim of finalizing the terms of a sale agreement as soon as possible.