Tata Steel on Thursday said it has reached a pact to sell some assets of its
Teesside plant in UK to Sahaviriya Steel Industries for about $469 million, ending nearly two years of search for a suitor.
"The agreement is the most significant achievement in the 22 months since Tata Steel began an exhaustive search for an alternative future for Teesside Cast Products (TCP), after the illegal withdrawal by a consortium of offtakers from a 10-year supply agreement," Tata Steel said in a statement.
For the proposed deal, Tata Steel UK has inked a definitive sale agreement with Sahaviriya Steel Industries UK, a subsidiary of Thailand's largest steel producer Sahaviriya Steel Industries.
The assets covered by the sale include the Redcar Blast Furnace, the Redcar and South Bank coke ovens, TCP's power generation facilities and sinter plant and the Lackenby steel making and casting facilities.
"I commend SSI, the government and the trade unions for their roles in bringing about this agreement, and in particular the people of Teesside for the spirit and fortitude they have shown throughout the last, difficult two years," Karl-Ulrich Kohler, MD & CEO of Tata Steel in Europe, said.
Noting that Tata Steel plans to retain a major presence in Teesside, Kohler said once the deal is complete, "Tata Steel would remain one of the largest private-sector employers in the area with more than 1,800 employees."
Tata Steel would continue to operate two large-diameter tube mills in Hartlepool, the Skinningrove special sections mill, Teesside Beam Mill and Teesside Technology Centre.
UK Business Secretary Vince Cable MP said the deal coming just over a year after the plant was mothballed is a tribute to both Tata Steel and SSI.
"This is a significant inward investment by SSI which will help to sustain the 700 jobs at the plant and create new ones at the site and the wider local economy," Cable added.
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