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After intense negotiations for the last six months, Tata Steel has managed to complete the sale of its long products division in the UK to London-based private equity firm Greybull Capital LLP on Wednesday.
Apart from paying a nominal consideration, Greybull will take over liabilities associated with the asset.
“From today (Tuesday), the Long Products Europe business which includes the Scunthorpe steelworks, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities, besides a rail mill in northern France, will trade under the name of British Steel. Altogether the business employs 4,800 people – 4,400 in the UK and 400 in France," said Tata Steel in a statement on Wednesday.
Last December, Greybull Capital signed an exclusive agreement with Tata Steel after the Klesch Group withdrew from a memorandum of understanding to buy the assets.
The sale of asset to Greybull follows an accelerated process of negotiations between Tata Steel UK and Greybull Capital, said Tata Steel, which is still in the market to find a suitor for its other units in the UK, including the one at Port Talbot in Wales as the workers' pension liability remains the major stumbling block.
Tata Steel has production capacity of 13 million tonnes in Europe and has already made provision of ₹7,000 crore for the struggling assets which have been making losses for the last few years.
Bimlendra Jha, Executive Chairman of the Long Products Europe business and CEO of Tata Steel UK, said as a responsible seller, Tata Steel is delighted to have secured a buyer for this business and hopes that under Greybull ownership, the business will continue the momentum of the improvement program that has been initiated in the last 12 months.
During the last 12 months, the Long Products Europe business has implemented a transformation plan including a portfolio restructuring of assets, underpinned by committed support from employees and their trade unions. This has focused the business on higher-value markets supported by a more competitive cost base, it said.
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