The former Corus steel plant in Teesside, UK (now owned by India’s Tata Steel) has been sold to the Thai company SSI for $469M.
The assets covered by the sale include the Redcar Blast Furnace, the Redcar and South Bank coke ovens, TCP’s power generation facilities and sinter plant, and the Lackenby steelmaking and casting facilities.
The deal also includes Tata Steel and SSI entering into a joint venture to operate Redcar Wharf (TCP’s bulk terminal), giving Tata Steel the flexibility to use Teesside to serve its other steelmaking operations, while also meeting SSI’s requirements on Teesside.
Tata Steel will continue to operate two large-diameter tube mills in Hartlepool, the Skinningrove special sections mill, Teesside Beam Mill and Teesside Technology Centre.
The Redcar furnace is UK’s largest with a hearth diameter of 14m.
SSI proposes to export slab to its 4Mt/y hot strip mill and its plate mill in Thailand.
At its mothballing in February 2010, TCP had a capacity of 3Mt/y. SSI plans to increase this and has been seeking assurances from the UK government that expansion will not be impeded by any lack of EU carbon permits.
Tata Steel, which became owners of the plant on their acquisition of UK-Dutch steelmaker Corus in 2007, say the sale of TCP along with other divestures will reduce its debt to equity ratio from the present 1.5:1 to 1:1.
Since 2004, TCP had been supplying 80% of its output to a consortium of companies consisting of Marcegaglia, Dongkuk Steel Mills, Duferco Participations Holding (through Steel Invest Trading) and Alvory (a subsidiary of Ternium).
Despite a 10-year off-take agreement these companies cancelled the agreement during the recession of 2009 causing the mothballing of the plant and the loss of 1700 jobs.
This matter between Tata Steel and the consortium is currently under arbitration.
In 2009, SSI had a net income of 1273.2M baht ($41.5M) and returned to profit.