Due diligence on the loss-making UK assets of its Port Talbot plant that Tata Steel has put up for sale would begin from Monday by the Liberty House Group who is slated to buy the plants.

The chef of the group Sanjeev Gupta also said that with governmental help, his company is confident of turning the business around.

High costs, weak demand and a flood of supplies from top producer China has forced Tata, Britain’s biggest steel producer to virtually walk away from its UK business. it is expected the formal sale process for the assets that the company had purchased in 2007 would begin by Monday.

“It’s a loss-making business and a loss-making business is not worth a lot in itself to buy. It’s more of a question of what are the resources required in turning it around,” Gupta told Reuters in a phone interview on Thursday.

The announcement was also hinted by Sajid Javid, the business secretary of UK. After a meeting with the Tata group chairman Cyrus Mistry in Mumbai, Mr Javid had also said that the Government will do all that it can to secure a buyer for the Welsh site, which employs 4,000 people.

In an attempt to get a grip on the crisis engulfing Britain’s steel industry, Mr Javid had flown into the Indian city on Tuesday night to meet Mr Mistry.

Describing the meeting as “constructive and positive” Mr Javid had added that there would be no set time frame for the sales process in a tweet on Twitter, the social network.

Mr Javid’s aim was “to secure as many jobs as possible” after Tata put its UK business – including its giant Port Talbot plant – up for sale last week, throwing doubts over the future of up to 40,000 British jobs, a spokesman for the Department for Business, Innovation and Skills had said ahead of the meeting.

Meanwhile Gupta said in London that his plan for the turnaround of the plant included changing of the raw material for the steel plants to locally available scrap, from imported iron ore. He said that this would be the best solution as long as power costs are manageable.

Competitive power prices would be critical in order to revive the business and fight competitors, the Indian-born Gupta, a 44-year-old Cambridge graduate who founded Liberty House in 1992, has already told the British government.

Earlier this week, talks with potential buyers for Tata Steel’s UK operations were opened by the British government which also included Gupta’s company Liberty House.

Gupta said that working capital needs to buy out Tata’s UK plants should not be a big issue as his company – Liberty House –  has a turnover of around $6.5 billion.

Once Gupta appoints a financial adviser, more clarity is expected to emerge. This step is expected to take place on Friday.

“In terms of money, what we will require is the working capital to run the businesses … and working capital we are quite good at, as that is what we have been doing in our trading business for the last 25 years,” Gupta said.

(Source:reuters.com & thetekegraph.co.uk)