Jul 29 2009
Corus and the four members of the steelmaking consortium that were party to the agreement to take almost 78% of the output from Teesside Cast Products (TCP) met today to consider the future of the agreement.
The purpose of the meeting was to get the offtakers to respect the contract with Corus that they unilaterally terminated on 7 April 2009, or to find some other solution that provided a sustainable future for TCP. Corus presented a number of options by which this could be achieved. Unfortunately it was clear from the meeting that the consortium is unable to guarantee long-term offtake in sufficient volume, and that Corus needs to pursue other solutions.
Since receiving the termination notice, Corus has been investigating options to keep the plant open. In order to maintain operations while it negotiated with the consortium and with other potential slab buyers, Corus has been loading the plant with internal orders. Corus has succeeded in stretching TCP's orderbook until the end of August. The company is also generating external enquiries for TCP's high-quality slab products and it is likely that the September orderbook will be filled in the next few days.
Only since the middle of June has Corus been free to explore alternative transactions that might lead to an acquisition of TCP. However, the extended orderbook will give extra time for the company to pursue a long-term solution for the business.
Kirby Adams, Corus CEO, said: "We feel great sympathy with our employees and the Redcar community because of the continuing anxiety they are experiencing about their future due to the consortium's termination of the offtake agreement without notice. We have kept the plant going for 100 days without any external business and continue to do everything in our power to keep TCP in operation despite the consortium's breach of contract and the economic downturn."