Metalnewsnet 10 May ：

Corus has hired Citigroup, the American investment bank, to sell its mothballed steel mill on Teesside, raising hopes that more than 2,000 jobs can be saved.

The steelmaker, which is owned by Tata of India and includes what was British Steel, is understood to be in negotiations with SSI, a Thai steel group. However, sources close to the talks cautioned that they were still at an early stage, and that there was no certainty that a deal would be reached.

The sticking point is likely to be the difficulty of integrating the plant at Redcar with SSI’s other operations.

It is thought some government assistance will be sought, probably in the form of grants to aid the Thai firm’s inward investment in Britain. Corus and its predecessor companies including British Steel have made steel on the site for 160 years.

A deal would be a boon for Corus, which has come under political pressure since parts of the Teesside plant were shut down in February.

About 1,700 workers were made redundant, with more expected to go this year. The mill is one of the largest private-sector employers in the area. Unions and MPs have accused Corus management, led by chief executive Kirby Adams, of not trying hard enough to find a new buyer or secure customers for the mill’s products.

The Redcar site has been under threat of closure for several years and came close to being axed in 2001 when Corus, then a quoted company, suffered a cash crisis and a boardroom split.

It was kept open after Corus struck a deal with a consortium of four international steel firms to buy the plant’s output.

Last year the consortium pulled out of the deal, leaving Teesside facing an uncertain future.

Tata, which had in the meantime bought Corus, said it would have to start mothballing the plant if a buyer could not be found. It is also pursuing compensation from the consortium for allegedly breaking its contract.

SSI — Sahaviriya Steel Industries — was set up 20 years ago as Thailand’s first maker of hot-rolled coil steel, which is crucial in the making of consumer goods. It is now Thailand’s largest steel producer.

If SSI succeeds in buying the Teesside plant, it will be the second Asian steelmaker to purchase former British Steel assets. Tata Steel bought Corus in 2007, paying £6.7 billion at the height of a boom in steel prices.

The firm hit hard times when steel prices slumped during the recession, but has since staged something of a recovery.

During the first nine months of last year Corus lost about $1 billion (£675m), but has been in profit since. It has cut 5,000 jobs since the start of last year.

Tata is now one of the largest industrial investors in Britain. After acquiring Corus it bought Jaguar Land Rover, the Midlands carmaker, which employs about 14,000 people. That company, too, suffered in the recession but is now enjoying a mini sales boom.

(from timesonline)