Tata rescue plan written 'on back of envelope'

Media playback is unsupported on your device
Media captionSanjeev Gupta says he now needs a detailed look at the business but he has ex-Tata executives involved

A potential buyer of Tata's UK steel operation admitted his takeover plans had been written "on the back of an envelope".

Sanjeev Gupta, head of Liberty, said taking over the loss-making business would be a "daunting proposition".

He reiterated that he would not be looking to make mass redundancies but said he could give no guarantees.

Tata is to start the formal process to sell its UK plants by Monday, according to Business Secretary Sajid Javid.

Mr Gupta, who has not visited the Port Talbot plant where Tata employs 4,000, told the BBC he would look for government help in retraining some of the workforce.

He has already indicated he sees the plant's future away from hot end, heavy steel-making.

The plan would be to move Port Talbot from blast furnaces to arc furnaces over time, using domestically available scrap instead of imported raw materials.

He accepted that some of the help he would look for on energy costs may test EU rules on state aid.

Mr Gupta said that if Britain were to leave the EU it would give the government more power to act unilaterally and free their hands, but there would also be other consequences.

Pressed on the question of timings for a sale, Mr Gupta said he thought Tata would want to agree a sale within weeks but the actual process could take up to six months.

Earlier, he said energy from the proposed £1bn Swansea tidal lagoon project - which he has a stake in - could help the business.

He told BBC Radio Wales it could be "one of the solutions" to making Port Talbot competitive.

Image caption Steve Webb served as pensions minister for five years

On Monday night, Steve Webb, pensions minister from 2010 to 2015, said Tata Steel's pension fund "looks pretty toxic" for any would-be buyer.

He said about 120,000 people would be in Tata's pension fund, which could be "billions by some measures".

This followed calls for the UK government to take over Tata's pension fund.

Mr Webb said: "You just never know with the pension fund deficit and I think any potential purchaser just wouldn't want that level of uncertainty."

Mr Gupta said in his discussions with the UK Government it was clear that ministers understood steel pensions were a key issue, and he was confident it would be addressed.

Liberty House, his company, reopened the former Alphasteel plant in Newport last autumn and is in negotiations to take over two mothballed Tata plants in Scotland.

He was speaking on the day Mr Javid has been in India for talks with Tata chairman Cyrus Mistry for the first time since the firm announced the sale a week ago.

Archbishop of Wales Dr Barry Morgan said that, if the banking industry was worthy of being rescued, so was steel.

"Its survival affects the employment prospects of many thousands of people," he said during his presidential address to the governing body of the Church in Wales on Wednesday.

UK steel crisis

Image copyright Reuters

'Substantial support' needed for steel

Who might buy Tata in Port Talbot?

What's going wrong with Britain's steel industry?

Tata Steel UK: What are the options?

Is China to blame for steel woes?

Related Topics

More on this story