As Tata Steel continues discussions with British private equity firm Greybull Capital, over the sale of its long products division, another steel company has expressed interest in the Scottish assets that come under the Greybull-Tata Steel deal.

Liberty House, a steel and metals group founded by Sanjeev Gupta, which is also acquiring assets from Lord Swraj Paul’s Caparo Group, is interested in Dalzell and Clydebridge, two steel plants in Scotland, within Tata Steel’s long products division. In October, Tata Steel had announced that the plate making facilities at these two plants would be mothballed, as part of a restructuring of the long products division, including Scunthorpe in England.

A person close to Liberty House confirmed the company’s interest, but declined to comment further on the details. Gupta, the managing director had previously spoken to BusinessLine about Liberty Global’s interest in developing its UK business. It restarted a mothballed mill in Wales that it had acquired in 2013, late last year, retaining some 150 workers over that two-year period. An acquisition of the Tata Steel Scottish assets would mark a break with its usual focus on secondary production, involving the recycling of scrap for the domestic market, which it has built up successfully in Africa.

How and whether any deal could be struck with Liberty House remains to be seen. A spokesperson for Tata Steel confirmed that the exclusive talks with Greybull involved all plate assets, including Dalzell and Clydebridge, and that there had been no plans to alter the restructuring programme. “However, we have been working closely with the Scottish government and we are fully engaged in the task force process of finding an alternative solution for the Dalzell and Clydebridge mills.”

Both Greybull Capital and Tata Steel have rejected a report in the Times newspaper on Thursday that suggested a deal for the long products division had been “virtually sealed”. The two companies signed a letter of intent to enter “exclusive” negotiations for the sale of the entire long products division (including Scunthorpe, assets in France, and the Scottish mills) in December.

“It is too early at this stage to describe the deal as done, talks are continuing as there are still certain elements to work through,” said the spokesperson for Tata Steel of the talks with Greybull.

In May last year, Tata Steel created a standalone long products division, which was hailed by unions as a move that would give the business greater flexibility and independence. But in August, the Klesch Group pulled out of discussions to take over the long products division, blaming it on a failure by the British government to have a comprehensive strategy to tackle domestic and international challenges facing the industry in the UK.

A representative of the Community union welcomed news of Liberty House’s interest. “This reinforces our strongly held view that the skills of the workforce and the assets at the plants can be competitive and these businesses can have a successful future with the right long-term investment.”