Corus has set the scope for a potential deal that would see the Indian-owned company sell its Teesside Cast Products (TCP) business to Thailand’s largest steel producer for around $500m (£320m).
To that end, the company signed a memorandum of understanding today with Sahaviriya Steel Industries (SSI) detailing the assets to be sold, including the Redcar and South Bank coke ovens, TCP’s power generation facilities and sinter plant, the Redcar Blast Furnace and the Lackenby Steelmaking facilities.
The deal, if successfully concluded, is expected to create a number of new jobs at the plant in addition to TCP’s existing workforce of over 700.
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 should result in the restart of steelmaking on Teesside in the first half of 2011.’
Corus and SSI will continue their negotiations, as well as holding talks with trade unions and the UK government in coming weeks and months with the aim of finalising the terms of a sale agreement as soon as possible.
TCP has been under threat since the collapse of a contract in May 2009. The plant has been mothballed since February 2010 and it will be some time before the plant is fully operational again.
Terry Pye, the national officer at the Unite union said: ’Last year this site was pronounced dead but thanks to the intervention and determination of the workforce and their unions to find a buyer this steel plant has been brought back to life. The deal secures jobs for the future and generates wealth and opportunity for the local community. This is fantastic news.’