British Steel sabotaged, Port Talbot destroyed

[Whitehall_Bin_Men]

TATA STEEL
OPINION
BY JOHN MCDONNELL
My blueprint to save British steel - and it's not just about EU
09:25, 3 APR 2016 UPDATED 15:14, 3 APR 2016 BY JOHN MCDONNELL
Labour's John McDonnell says "doing nothing is not an answer" as he unveils his four point action plan to rescue the British steel industry
http://www.mirror.co.uk/news/uk-news/blueprint-save-british-steel-its- 7680255
John McDonnell
The steel crisis exposes the Tories as out of touch and incompetent.

Forty thousand workers and their families face the loss of their livelihoods.

As we saw under the Tories in the 1980s, closures like this can tear apart entire communities.

Even some Tory MPs share Labour’s call for emergency measures like nationalisation not to be ruled out.


Yet David Cameron refuses to recall Parliament for an emergency debate.

Getty
Some have tried to claim measures to combat climate change are to blame.

However less than two per cent of steel production costs are due to climate measures.

In reality, British steel is in crisis because of the dumping of cheap steel by China and because we have a government that will not take the action necessary.

Other EU countries like Germany and Italy have acted to protect their steel industries.

Read more: Sajid Javid is confronted by Tata workers but still fails to come up with a rescue plan

The barrier to action isn’t in Brussels. It’s in West-minster, where the Government has spent three years blocking EU action.

One EU official even claimed the Tories were blocking action on dumping as a “thank you” to China.

This has done us no good. China has slapped a 46 per cent tariff on British steel.

Labour has different priorities. This is our four-point Action Plan to save British steel:

Stabilise the industry and protect steelworkers by allowing time for a buyer to be found but being prepared to nationalise plants threatened with closure.
Fast-track key investment projects like high-speed rail in the North, and build them with British steel.
Create a level playing field. The Tories must stop blocking EU initiatives to protect steel but also look at business rates and energy prices.
Restructure the industry so it has a future, in partnership with workers, management and major customers working alongside government.
This isn’t just about the jobs and communities now being threatened.

It’s about how we start to make an economy that works for the good of all.

Doing nothing is not an answer.

#SaveOurSteel

[Whitehall_Bin_Men]

Thyssenkrupp, Tata in Talks on European Steel Tie-Up
Companies have been holding high-level talks for over a year, people familiar with matter say
Molten steel in a converter on the production line at ThyssenKrupp's steel plant in Duisburg, Germany. The company has said in the past that consolidation in the steel sector would make sense. ENLARGE
Molten steel in a converter on the production line at ThyssenKrupp's steel plant in Duisburg, Germany. The company has said in the past that consolidation in the steel sector would make sense. PHOTO: BLOOMBERG NEWS
By EYK HENNING and ALEX MACDONALD
Updated April 2, 2016 8:56 a.m. ET
0 COMMENTS
http://www.wsj.com/articles/thyssenkrupp-shares-jump-on-tata-steel-tie -up-talk-1459502224
FRANKFURT—German engineering conglomerate Thyssenkrupp AG and India’s Tata Steel Ltd. have held talks on combining their continental European steel operations, as global overcapacity weighs on prices and profits, according to people familiar with the matter.

The companies have been holding high-level talks for over a year, the people said, adding that Thyssenkrupp’s preferred structure might be a tie-up of the two companies’ steel assets in a joint venture.

It wasn’t immediately clear where the talks now stand, though one of the people said an agreement is unlikely in the short term. If completed, the transaction would help both companies achieve scale and cost savings.


Thyssen Krupp shares rose as much as 7.7% in morning trading Friday after German daily Rheinische Post reported the companies were in advanced talks about a combination. The stock ended the day up 4.9%.

A reduction of its steel exposure would help Thyssenkrupp sharpen its profile as an engineering company with a highly profitable elevator business. Such a move would likely please activist investor Cevian Capital Partners, the company’s second-largest shareholder, with a stake of more than 15%. A spokesman for Cevian declined to comment on Friday.

Tata Steel earlier this week said it would explore the sale of its entire U.K. business, a move analysts say could pave the way for a combination of its Dutch assets with Thyssenkrupp’s European steel operations.

Should Tata Steel sell its U.K. operations, its European exposure would focus on a Netherlands-based flat-products business, Jefferies analysts noted this week. “Given Thyssen’s interest in pursuing consolidation solely with another premium flat-steel producer, we believe this cleaning up of Tata’s portfolio may help free up the core Dutch assets for Thyssenkrupp,” they said.

Credit Suisse analysts came to the same conclusion, saying a Tata Steel exit from the U.K. would be a prerequisite for any deal with Thyssenkrupp. “This scenario, in turn, could lead to the creation of a 20 million tons high-quality steel producer in Europe and the eventual exit of steel for Thyssenkrupp, with arguably a strong synergy story,” they said.

Tata Steel is Europe’s second-largest steelmaker by production capacity, after Luxembourg-based ArcelorMittal SA. The company has in recent months announced several rounds of layoffs at its U.K. operations, which include steel mills across Wales and England. It said in January that it aimed to reduce its workforce to 14,000 after consulting with unions about the proposed cuts.

The company employed 17,000 workers just before it began eliminating jobs in 2015.

China has been swamping global markets with low-priced steel, intensifying pressure on Western rivals already reeling from overcapacity. Steel imports from China, the world’s largest steel producer, to the European Union have more than doubled over the past two years.

On Friday, Fitch Ratings cut Tata Steel’s credit rating, citing rising debt and lower profitability across all regions, especially the U.K. The ratings firm said it would consider a further cut should the steelmaker accrue more debt to close any operations in the U.K. By the same token, Fitch said it might consider upgrading the steelmaker if proceeds from U.K. asset sales were to go toward reducing debt.

Tata Steel finance chief Koushik Chatterjee told the Financial Times this week that the company had taken a charge of about £2 billion ($2.87 billion) in writing down the value of its U.K. operations to almost zero. The comments was confirmed by a Tata spokesman.

Thyssenkrupp’s chief executive, Heinrich Hiesinger, has said in the past that consolidation in the sector would make sense, while stressing that combining assets was more likely than one company acquiring another.

Combining Tata Steel’s Dutch plant with Thyssenkrupp’s operations could yield €1 billion in annual synergies, Credit Suisse said, noting that the plant would be a good fit with the German company’s massive facility in Duisburg, Germany.

Under Mr. Hiesinger’s reign, Thyssenkrupp in 2014 sold a steel plant in the U.S. after protracted negotiations, but failed to sell its Brazilian operations.

Activist investor Cevian is supportive of Mr. Hiesinger’s turnaround strategy. The investment firm started building a stake in Thyssenkrupp in 2013, sparking rumors that the German company might split up.

—Hendrik Varnholto contributed to this article.

Write to Eyk Henning at eyk.henning@wsj.com and Alex MacDonald at alex.macdonald@wsj.com

Corrections & Amplifications
Cevian started building a stake in Thyssenkrupp in 2013. An earlier version of this article incorrectly said it started building a stake in the company in 2011. (April 2)

[TonyGosling]

German industrial giant ThyssenKrupp linked to potential bid for Tata's Port Talbot steelworks
10:11, 3 APR 2016 UPDATED 10:11, 3 APR 2016
BY SION BARRY
ThyssenKrupp has been linked to Port Talbot, but there is also speculation that it up eyeing up a merger with Tata's Dutch steel business
http://www.walesonline.co.uk/business/business-news/german-industrial- giant-thyssenkrupp-linked-11130067

German industrial conglomerate ThyssenKrupp has been linked to a bid to acquire the Port Talbot steelworks, but any move would require significant support from the UK Government.

According to the Guardian newspaper the German company had been in talks to acquire Tata's UK and Dutch steel operations, but initially walked away due to concerns over Tata financial losses in the UK and huge pension liabilities.

However, a source close to Tata told the paper that a "they could find a solution" and potentially rescue the deal with the Germans if the UK Government provided substantial financial support and the pension scheme, which has 130,000 members and currently has a deficit of more than £600m, was restructured.

However, also mooted is a merger of what will remain of Tata's steel making in Europe at its Ijmiuden plant in Holland, with the German industrial conglomerate.

ThyssenKrupp declined to comment.

A new business would be created from the merger of the two mainland European steel operations, which would receive a boost from economies of scale and cost-savings.

Liberty House
German interest come as managing director of commodities group Liberty House, which already operates a steel mill in Newport and the Uskmouth Power Station, S anjeev Gupta ,is set to arrive in the UK tomorrow for talks with UK Government officials and Tata on a potential bid for the Port Talbot steelworks.

While only at a preliminary stage this would see Port Talbot, which currently employs more than 4,100, being transformed from a traditional blast furnace steel operation into an electric arc furnace facility producing steel from recycled metals. Mr Gupta said it would also require support from the UK Government.

Tata's position
Indian-owned Tata, which acquired its UK and Dutch steel business for £6.2bn in 2007, said it was still committed to finding a buyer for its UK operations.

In a statement the company: "We are committed to running a meaningful process to explore strategic alternatives for Tata Steel's UK business. This could include finding one or more buyers for our UK operations.

The sale process began on March 30 and although there is no fixed timeline, it needs to be implemented urgently to avoid a long period of uncertainty for employees and customers. Tata Steel Europe is in the process of finalising the appointment of advisers and will soon launch a process globally of seeking an investor for the UK operations.

"We will continue our discussions with the Government and other stakeholders as we seek its support to achieve the best possible outcome in the circumstances for the UK business and we will continue discussions with Greybull Capital in relation to the potential sale of our UK Long Products business.

“As is our standing practice we do not comment on merger and acquisition speculation."