THE Indian steel giant Tata has agreed to sell part of its UK business to investment firm Greybull Capital today, with the result that thousands of job losses have been halted and allowing the company to now focus on selling its big Port Talbot plant, in South Wales.
The British government has been under pressure to ensure the plants are sold rather than closed after Tata, one of the world’s biggest steelmakers, announced on March 30 it would sell its loss-making British business, with 15,000 jobs likely to go.
Greybull said it would buy Tata’s Long Products Europe division in Scunthorpe, northern England, which employs 4,400 people. Meanwhile, the process to find a buyer to save the Indian steelmaker’s other major plant at Port Talbot also began today.
Greybull said it was arranging a £400m investment and financing package for the Scunthorpe business, as part of a deal which included agreement with suppliers and trade unions on resetting the business’s cost base.
The deal, which will see the business renamed British Steel in a revival of a historic name last used almost two decades ago, is expected to be completed in eight weeks subject to certain conditions being met, including a ballot of trade union members.
The UK Prime Minister David Cameron, who is already grappling with rows over Britain’s membership of the European Union and a referendum on its future, his budget and his tax affairs, has been scrambling to try to find buyers for Tata’s assets to save jobs.
Tata put its British operations up for sale, citing a global oversupply of steel and cheap imports from China, high costs and weak domestic demand.
The deal for the Scunthorpe business would be done without any redundancies, said Greybull, adding that the acquisition was completed for a nominal £1 and also included two mills, an engineering workshop and a design consultancy in Britain, plus a mill at Hayange, France.