Excalibur Steel, the management buyout group interested in purchasing Tata Steel's assets in Britain, will meet bankers on Friday to seek financing for the deal.

Tata UK executive Stuart Wilkie, who leads the group, said that it will hold talks with one British and three international banks to present its proposal to save the loss-making business from the threat of closure.

"Ideally, by the end of next week we will have secured necessary lines of finance," Wilkie told Reuters.

Excalibur and Indian-born Sanjeev Gupta's metals group Liberty House both submitted letters of intent to buy Tata's UK operations this week.

The two groups have emerged as potential bidders after India's Tata Group announced plans in March to sell its entire UK steel operation, which had been hit by cheap Chinese imports, soaring costs and weak demand.

Keen to avoid the loss of 10,000 jobs, the Conservative government has offered hundreds of millions of pounds in support to potential buyers and said it could take a 25 percent stake in the firm.

However, Excalibur expects to shed about 1,000 jobs from Tata's UK workforce.

Wilkie, based in south Wales as head of Tata's UK strip steel business, expects the British government to back its statement on funding.

"All the discussions we've had with government are in line with that."

Wilkie added that efficiencies achieved since last year, when the company was losing about 1 million pounds ($1.45 million) a day had now reduced losses to a quarter of those levels.

"That's significantly better than what was in the (turnaround) plan," added Wilkie, who has decades of experience in the industry after started his career in the giant Ravenscraig steel mill in the Scottish town of Motherwell.

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Liberty House has outlined a plan to replace the giant blast furnaces with facilities to process imported slab steel instead.

Wilkie said however that such steel would not be suitable for Tata UK's current customers in the motor industry.

"Over 60 percent of what we make goes to downstream business and key within that are the automotive and packaging industry. To the best of my knowledge nobody at this moment is using electric arc furnaces to make steel (for those sectors) on a mass production basis."

He said the advantage of Excalibur's plan was that it would use the two existing blast furnaces. "We have to work with the equipment we have, on an ongoing basis, to keep employment going."

The group confirmed that it wants 10 percent of its funding to come from employees, including those in the management buyout team.

Tata's sizeable pension obligations would be a sticking point for anyone wanting to take on the business.

The retirement fund is estimated to be in deficit by around half a billion pounds.

"We would expect the government in conjunction with the pension regulator, the company and trustees of the pension would close the pension scheme and make it secure," Wilkie said, adding that Excalibur would start a new pension scheme.

"If the liability for the pension was on the table, then everybody would walk away," he said.-Reuters