- Government working to ‘remove potential barriers’ to sale
- Tata considering bids for U.K. assets after Monday deadline
The U.K. government is considering changing the country’s steel pension plan to aid a sale of Tata Steel Ltd.’s struggling assets.
The government started a consultation on delivering better clarity and security for members of the pension plan, according to U.K. parliamentary minutes published online. Tata on Wednesday said it’s evaluating offers for its British assets that include the Port Talbot plant in South Wales and Business Secretary Sajid Javid today said there are a “number” of credible bids.
Tata Steel said in March that after years of losses it planned to sell its U.K. operations, putting 15,000 jobs at risk. Bidders don’t want to be saddled with pension liabilities and the steelmaker may move the pension assets to an insurance company, according to people with knowledge of the matter, who asked not to be identified because the information is private.
The pension plan may have a deficit of between 700 million pounds ($1.03 billion) and 1.5 billion pounds, according to the parliamentary minutes.
"It is not the Government’s job to pick a winner or to back a specific bid," Javid said. "What we can do is listen to Tata, listen to the bidder and work with everyone involved to remove potential barriers to a sale. This is very much about this scheme, and this scheme only, in these very unique circumstances.”
The government has offered hundreds of millions of pounds of financial support as an incentive to a potential buyer and the state would also consider taking a stake of as much as 25 percent.
The bidding process ended on Monday and the company hasn’t yet shortlisted any bidder, Chief Financial Officer Koushik Chatterjee said yesterday.
Liberty House Group and Excalibur Steel, a buyout team led by a Tata executive, are among those that have studied buying the assets, people familiar with the matter said this month.