Consortium bids to buy mothballed Corus plant

A bid has been launched to buy a mothballed steel plant, it was confirmed today.

A project team put together by North East businessman Chris Musgrave is seeking to buy Corus's Teesside Cast Products (TCP) plant in Redcar.



The consortium includes London-based private equity house and metallurgy experts Hatch Corporate Finance.



Mr Musgrave, the man behind Wynyard Park Limited, approached Middlesbrough Mayor Ray Mallon and Middlesbrough Football Club chairman Steve Gibson for advice after both called for more action to safeguard the area's 170-year steel-making heritage.



Mr Mallon said the consortium's intention, if the bid was successful, was to re-commence steel-making.



"In December, myself and Steve Gibson went public with our concerns that, instead of the focus being on saving steel-making, all the talk seemed to be on the area trying to recover from the closure of Corus," he said.



"We believed that was premature as there were avenues which had not been fully explored.



"No-one should be in any doubt that there is still a long way to go before any steel jobs are saved - and it may still prove impossible so people should not build their hopes up - but today's news is welcome and is a step in the right direction.



"I have been very impressed by the determination of Chris Musgrave and Paul Weavers to move this along and the involvement of such a world-renowned company as Hatch is very encouraging.



"I have said all along that I will do all I can to assist this team or any other consortium interested in getting a bid together to try to save steel-making on the Tees. That remains the case - my door is always open."



Mr Mallon added: "It's likely that any successful bid will require Government support.



"An election is looming and we don't know who the Government will be after that, which is why both major parties have been fully briefed."



Downing Street has been advised of the development by Middlesbrough Labour MP Sir Stuart Bell.



Workers' representatives, steel industry suppliers and customers have also been informed, together with Conservative leader David Cameron.



Mr Musgrave said: "Both myself and Paul are convinced that steel-making on Teesside can be saved and we approached Ray Mallon because it was clear he shared our determination to do all we can to achieve this.



"This is a different industry to those on the Wynyard site but the principle of building sustainable business is the same.



"An offer for the Corus site, which combines local knowledge and international expertise, has been made.



"This can work with the support of the unions, Tata and the Government."



Mr Musgrave added: "We do not want to raise false hope and it must be stressed there is still a long way to go but we believe this plan is workable and gives a chance for steelmaking to resume."



Vera Baird, Labour MP for Redcar, said: "It is good to see Mr Weavers' group feeling confident that they might play a role in the future of TCP now that they have had time to get some information about the plant.



"They have worked quickly, which is to be commended.



"This is a non-binding offer so it is a part of negotiating process and I await with interest to see an early response from Corus.



"Already £10 million has been disbursed effectively from the Government's £60 million programme for the Tees Valley Industrial Programme - and more to come.



"This is in addition to the existing £130 million investment in business and support skills in the Tees Valley to run from 2009 to 2012.



"The £200 million steel pipe contract for Corus Tubes at Hartlepool could not have been achieved without the Government providing capital tax allowance relief to the tune of £320 million.



"Many of the jobs created will match the skills of Redcar workers."



The mothballing process at TCP began on February 19. At least 1,600 people stand to lose their jobs over the coming months.



Earlier this week, Corus announced that it would create 100 jobs at its Hartlepool site after it won a £200 million pipeline deal.

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