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Tata Steel urged to delay UK sale to after Brexit vote, bidder rules out pensions buy

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Tata Steel urged to delay UK sale to after Brexit vote, bidder rules out pensions buy

Stuart Wilkie, a TataSteel Ltd. executive leading the buyout bid for its via an entity named Excalibur,ruled out acquiring the £15 billion workers' pension scheme, London's Financial Times reported May 4.

The pension scheme is in a £485 million deficit, with Wilkiesaying Excalibur will not be able to afford the liability but would look to setup a defined-contribution fund instead.

"We want to be a steel company, not a pension company thatmakes steel. … The pension [liability] for us is off the table," Wilkie, whois the head of Tata Steel UK Ltd.'sstrip steel unit, was quoted as saying by FT.

Excalibur is one of the biddersfor Tata's loss-makingU.K. steel business and has been in talks to secure over £300 million in financingfrom the government and lenders to revamp it.

Meanwhile, Excalibur plans to avail the government's which includedan offer to acquire a 25% stake in the business, as well as a for future owners.

In addition, Wilkie is not willing to take up the environmentalliabilities attached with Tata's steelmaking operations including the estimatedclean-up costs of nearly £1 billion for just Port Talbot.

He also complained that it was "impossible to conduct"due diligence given the tight schedule for the sale process with Tata looking toconclude by end-June.

In a separate report, the Financial Times wrote that in order to focus on Britain's June 23 referendumon whether to exit the EU, the sale of Tata's U. K. operations is said to have beenmoved to around the weekend of June 25 when the company's board meets in Mumbai.

However, industry sources told the news outlet the company isbeing pressured from the government to extend the sale from the May-end or mid-Junetimeline the company was hoping to achieve.

A senior government official said the government does not havethe power to order Tata to do so.

As of May 3, Tata is said to have received initial bids for itsentire business from two organizations, Liberty House and Excalibur.