LONDON (AP) — Two firms have expressed interest in buying the available assets of Tata Steel UK, setting up rival bids that could help revive the troubled industry in Britain.
Commodities trading firm Liberty House said Tuesday it has submitted a letter of intent to bid for Tata Steel's available assets in the U.K., including the massive Port Talbot steel works in south Wales. A second group planning a management buyout, Excalibur Steel UK, has also registered a letter of intent.
Liberty said its bid uses a model that will involve a transition of steelmaking in blast furnaces "to recycling steel in electric arc furnaces over time." The company also said Cambridge University professor Julian Allwood — who has studied reducing carbon emissions by making less new materials — has joined the team of external advisers.
"Steelmaking would be ultimately powered by renewable energy sources," the company said in a statement. "Liberty believes the U.K. steel industry can achieve long-term viability if based on an agile, sustainable, non-cyclical model."
The other bid is led by Stuart Wilkie, chief executive of Excalibur and previously the hub director of Tata Steel's Strip Products in the U.K. He said their project has made enormous advances in the two weeks since making the decision to pursue a buyout.
"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 steel making and processing," Wilkie said. "We are confident we can turn the business around and sustain profitable steel-making in the United Kingdom."
India-based Tata has said it is losing 1 million pounds ($1.4 million) a day at Port Talbot amid high costs and a glut of cheap Chinese steel in global markets.
The government has said that it is prepared to take a 25 percent stake in any rescue of Tata, mindful of the 4,000 people who work at Port Talbot alone.
Critics say the government should reduce energy costs and cut business taxes to help the steel industry. If it can't find a buyer, some argue the government should nationalize the plants to ensure Britain keeps producing the steel needed by U.K. manufacturers.
Unions argue that the state pumped more than 100 billion pounds into banks during the financial crisis — and that the steel industry is also worth a helping hand in a time of need.