Sajid Javid flew to Mumbai on Tuesday night for talks with the Indian owner of Tata Steel in an attempt to win more time to secure the future of thousands of British jobs.
The business secretary will hold talks with Cyrus Mistry, the chairman of Tata, after a day of crunch meetings in the UK. The talks ended with unions calling for Javid to ensure the Indian company does all it can to find a saviour for its UK sites.
About 40,000 jobs are at risk after Tata announced last week it would sell its UK steel business, including the blast furnaces at Port Talbot, the biggest steelworks in the country.
Javid held talks about a potential rescue deal for Tata’s UK sites with Sanjeev Gupta, who runs the metals group Liberty House. He has become the most high-profile candidate to potentially buy the business after conducting a series of television and radio interviews.
Gupta’s plan is thought to involve replacing the blast furnaces at Port Talbot with electric arc furnaces that process scrap steel. However, this could take years and Gupta has indicated he would need significant financial support, with the government helping with Tata’s pension liabilities of almost £15bn and either cutting environmental taxes or subsidising power projects the tycoon is involved with.
The government and unions have already indicated they would like to preserve the blast furnaces at Port Talbot, which make raw steel.
Tata sources cast doubt about the prospect of Gupta being able to rescue its UK sites. They cautioned that the prospect of any rescue deal is “slim”. Tata is keen to sell the business to one buyer, rather than breaking up the business, one source said.
A buyer for the entire business is likely to require “mega bucks” from the government to make Port Talbot viable, the source added. “They want to package the whole thing. They don’t want to upset the unions,” they said.
Other parties are interested in rescuing the business. These include Greybull, the investment firm, and ThyssenKrupp, the German industrial conglomerate.
Speaking after his meeting with Javid, Gupta said: “I am pleased to report that we had a positive meeting today. UK government appears highly supportive and is proactively engaged in finding a long-term solution.
“The next step is for Tata to define the formal sales process and request indications of interest from potential buyers. We await further details on this and then will assess our own next step.”
Gupta has pledged to avoid widespread job losses if he manages to buy the business.
Trade unions have welcomed Gupta’s interest but said it is too early to judge the merits of potential bidders. Union leaders met with Javid after he spoke to Liberty, when they urged him to secure guarantees from Mistry in Mumbai and also warned against a breakup of the business.
Tony Burke, assistant general secretary at Unite, said it had been a “positive meeting”. He added: “The unions made clear that we want him to go to India and make it clear that we need time to put together a deal. We are looking for the whole of Tata to be purchased by one buyer. We are against a breakup.”
Javid confirmed that Liberty is not the only company to show interest. “It’s great that this interest is out there,” he said.
The business secretary said a meeting with David Cameron and Labour’s Welsh first minister, Carwyn Jones, had also been constructive.