The UK steel industry is "underinvested" and "overmanned", according to the former chairman of Tata Steel.
Ratan Tata, the Indian industrialist and former chair of Tata Group, made his first public comments on the steel crisis and warned any potential buyer of the pitfalls.
“Right now the problem is that the English facilities are underinvested [and] overmanned,” he said, according to the Financial Times.
The businessman added it would be necessary to “cut back on the size and the scale of the operations and make them profitable”, which was “extremely challenging” but not impossible.
Ratan Tata no longer runs the company's day-to-day operations, but remains influential on the board of several charities, which are investors in the business.
His comments came as commodities trading firm Liberty House, which has emerged as the frontrunner to buy the UK steel business, admitted the plans had been written up on “the back of an envelope”.
Liberty has been meeting with the government to discuss a possible takeover, but it wants several concessions before putting pen to paper.
Some have questioned whether it has the resources to pull off such as deal, since its UK revenues were less than $60 million in 2014, with profits of $90,626. The company said global turnover was more than $3.5 billion last year, with operations in Dubai, Singapore, and Hong Kong.