Bidders involved in the Tata Steel sales process have urged the Indian company to continue to look for a buyer, following reports the sale will be put on hold.
Tata has reportedly paused the sales process following the Brexit vote and a jump in steel prices. An industry source told City A.M.: “If this is true then it sounds like a U-turn, and it will just cause more uncertainty and damage to the industry.
“This whole situation has been up in the air for several months. There are people ready to resolve it so they should be given the opportunity to do so. It really must be resolved soon.”
In mid-June, trade association UK Steel warned the industry crisis would worsen after Brexit, arguing Britain is better able to prevent Chinese steel dumping from inside the EU.
And Westminster sources also point to David Cameron’s resignation, and the role of business minister Sajid Javid in the leadership campaign of work and pensions secretary Stephen Crabb, arguing there is a lack of political pressure for progress.
“Even before Brexit, Tata had concerns about officials being slow to come up with detail on proposals like the 25 per cent stake,” one said.
“Brexit and Cameron’s resignation compounds concerns about that. The vacuum in government is real cause for concern.
“Without pressure being exerted by political leaders in government departments there is the worry that nothing will happen, which means the crisis gets worse”
However, a Downing Street spokeswoman today played down the fears: “They are still serving in the government, and work continues.”
City A.M. understands some companies have already spent more than £1m on the bidding process. Management buyout firm Excalibur Steel, global metals investor Liberty House and Greybull Capital are all thought to be in the running to buy Tata Steel’s UK assets, which include the Welsh Port Talbot plant.
Seven bids advanced to the second stage of the sales process in early May, after 20 expressions of interest were submitted in the first round.