Excalibur Steel UK and Liberty House have confirmed they have submitted letters of intent to bid for Tata Steel's UK assets.
They are the only two confirmed bidders for Tata's facilities in the UK, which the Indian steelmaker put up for sale at the end of March.
Today marked an interim deadline in the sale, as the final day when companies could submit letters of intent to buy the steelmaker's entire UK business, including the blast furnace site at Port Talbot and a specialty business in Yorkshire.
Excalibur, which is backed by Welsh billionaire Terry Matthews, was formed in mid-April to mount a management employee buy-out and is being headed by former Tata Strip Products executive Stuart Wilkie.
"This project has made enormous advances in a very short period. It was only two weeks ago we made the decision to pursue a buy-out that enables the management and staff to take a stake in the ownership and operation of a strategic British industry," Wilkie said in a statement.
"We believe we have a large number of the pieces in place required to make this a success, including a management team with vast experience of steelmaking and processing. We are confident we can turn the business around and sustain profitable steelmaking in the United Kingdom, including both the downstream and upstream operations."
Commodities investor Liberty House, headed by Sanjeev Gupta, has been working with the European arm of Australian bank Macquarie Capital on the sale and has enlisted the support of the State Bank of India Capital Markets as a co-financial adviser.
"The bid is based on Liberty's Greensteel business model and would involve a transition from steelmaking in blast furnaces to recycling steel in electric arc furnaces over time while ensuring the company continues to meet key customers' quality requirements," Liberty House said in a statement.
"Steelmaking would be ultimately powered by renewable energy sources. Liberty believes the UK steel industry can achieve long-term viability if based on an agile, sustainable, non-cyclical model which integrates liquid steel-making from recycling with downstream production and the manufacture of advanced engineering products."
Liberty has appointed a 12-strong internal project team, dubbed Project Greensteel Pluto, which will be led by Gupta. He will be working with Jay Hambro, group chief investment officer of the GFG Alliance and chief executive of the SIMEC Group, and Jon Bolton, chief executive of Liberty Steel UK Plates and UK Steel Development, and a former director of Tata Steel.
Tata has not yet clarified when it expects the sale process to be completed. It was widely reported that the sale would be wrapped up by 28 May, although Tata later told City A.M. it "did not recognise" that timeline.
The government has previously said it would be willing to take a 25 per cent stake in any rescue of Tata Steel's operations, which could take the form of an equity stake or loans on commercial terms.