"Corus UK Ltd and Sahaviriya Steel Industries Public Company Ltd today signed a Memorandum of Understanding which sets out the scope of a potential transaction whereby SSI would acquire from Corus the Teesside Cast Products (TCP) business in a transaction valued at approximately USD 500 million," Tata Steel said in a statement here.
Tata Steel said that the deal, if successfully concluded, is expected to create a significant number of new jobs at the plant in addition to TCP's existing workforce of over 700 and will provide a considerable boost to the local economy.
"The assets covered by the MoU include the Redcar and South Bank coke ovens, TCP's power generation facilities and sinter plant, the Redcar Blast Furnace and the Lackenby Steelmaking facilities," it added.
Corus MD and CEO Kirby Adams said, "We are very pleased to announce this significant progress in our long-held objective to sell the TCP assets to a strategic industry investor.
"This is the first of several steps required to reach a definitive sale agreement in the coming months which, with the anticipated co-operation of Government, employee representatives and the North East community, should result in the restart of steelmaking on Teesside in the first half of 2011."
A sale agreement would also result in Corus and SSI operating Redcar Wharf (TCP's bulk terminal) as a joint venture, giving Corus the flexibility to use Teesside to serve its other steelmaking operations, while also meeting SSI's requirements on Teesside, it added.
SSI President Viriyaprapaikit said, "For the past year we have held very constructive negotiations with Kirby Adams and the Tata Corus team and we look forward to engaging with all stakeholders in the same spirit of co-operation to secure a final agreement."
Tata Steel added that Corus and SSI will continue their negotiations, as well as holding talks with trade unions and the Government in coming weeks and months with the aim of finalising the terms of a sale agreement as soon as possible.
TCP was partially mothballed last year after a consortium of buyers broke an offtake contract with the plant last year.
