Excalibur Steel, the management buyout vehicle interested in purchasing Tata Steel’s UK assets, will meet bankers on Friday to seek financing for the deal.
Tata UK executive Stuart Wilkie, who leads the group, said that it will hold talks with one British and three international banks to present the buyout plan.
“Ideally, by the end of next week we will have secured necessary lines of finance,” Wilkie told Reuters late on Thursday.
Excalibur and Sanjeev Gupta’s metals group Liberty House both submitted letters of intent to buy Tata’s UK operations this week.
Wilkie added that efficiencies achieved since last year, when the company was losing about £1m a day had now reduced losses to a quarter of those levels.
“That’s significantly better than what was in the (turnaround) plan,” he said.
The group confirmed that it wants 10 per cent of its funding to come from employees, including those in the management buyout team.
Wilkie also said that he expects the British government to back its recent statement saying that it would provide up to 25 per cent in funding.
“All the discussions we’ve had with government are in line with that.”
Tata’s sizeable pension obligations would be a sticking point for any party wanting to take on the business, Wilkie acknowledged.
“If the liability for the pension was on the table, then everybody would walk away,” he said.