Open / Close Advertisement

Corus, SSI Sign MoU for Potential Sale of Teesside Cast Products

08/30/2010 - Corus UK Ltd. and Sahaviriya Steel Industries Public Co. Ltd. have signed a Memorandum of Understanding that sets the scope of a potential transaction whereby SSI would acquire from Corus the Teesside Cast Products business.

Corus UK Ltd. and Sahaviriya Steel Industries Public Co. Ltd. (SSI), Thailand’s largest steel producer, have signed a Memorandum of Understanding (MoU) that sets the scope of a potential transaction whereby SSI would acquire from Corus the Teesside Cast Products (TCP) business.
 
The transaction would be valued at approximately US$500 million (GBP320 million). The deal, if concluded, is expected to create new jobs at the plant in addition to TCP’s existing workforce of more than 700.
 
The assets covered by the MoU include the Redcar and South Bank coke ovens, TCP’s power generation facilities and sinter plant, the Redcar Blast Furnace and the Lackenby Steelmaking facilities.
 
A sale agreement would also result in Corus and SSI operating Redcar Wharf (TCP’s bulk terminal) as a joint venture, giving Corus the flexibility to use Teesside to serve its other steelmaking operations while also meeting SSI’s requirements on Teesside.
 
Corus MD and CEO Kirby Adams said: “We are very pleased to announce this significant progress in our long-held objective to sell the TCP assets to a strategic industry investor. This is the first of several steps required to reach a definitive sale agreement in the coming months which, with the anticipated cooperation of government, employee representatives, and the North East community, should result in the restart of steelmaking on Teesside in the first half of 2011.”
 
Win Viriyaprapaikit, President of SSI, said: “For the past year we have held very constructive negotiations with Kirby Adams and the Tata Corus team...This transaction will enable SSI to fulfill its long-standing objective of becoming a fully integrated steel producer with both primary steelmaking and rolling facilities.”
 
Corus and SSI will continue their negotiations, as well as hold talks with trade unions and the government, in coming weeks and months with the aim of finalizing the terms of a sale agreement as soon as possible.
 
Corus is Europe's second-largest steel producer. With main steelmaking operations primarily in the U.K. and the Netherlands, the company supplies steel and related services to the construction, automotive, packaging, mechanical engineering, and other markets worldwide. It is a subsidiary of Tata Steel, one of the world’s top 10 steel producers. The combined enterprise has an aggregate crude steel capacity of more than 28 million tonnes and approximately 80,000 employees across four continents.