Tata Steel close to selling UK long products plant: report
07 December 2015
Tata Steel, the UK's largest steelmaker is reported to be close to a deal to sell off one of its steel plants, in a move that would secure thousands of jobs.
Turnaround fund, including Greybull and Endless, two of UK's biggest turnaround financiers as well an unknown American private-equity house, are looking to invest in Tata's long product arm, which has recently won a five-year supply contract with French operator SNCF, says a report in to The Sunday Telegraph.
Tata Steel is likely to reach a deal on the investment in Tata's long products arm, which is at the heart of its Scunthorpe steel works in Lincolnshire, as early as next week after receiving formal bids from the three parties, the report said.
The business, which produces steel long products used in construction and heavy industry, is expected to have around 5,000 staff after the redundancies.
The high cost of steel making in the UK and most other western economies has complicated business for steelmakers who have are struggling to compete in the global steel market, where prices are depressed by China's state-backed steel mills dumping overcapacity.
Some media reports also suggested that Tata Steel may cut 720 jobs at its Rotherham plant in South Yorkshire after talks to save redundancies failed. The company had, in July, said it may have to cut jobs at its Rotherham plant but that it would try to minimise job losses.
The Rotherham unit makes steel bar products for the car manufacturers.
Britain's steel industry saw 5,000 jobs being axed or earmarked for redundancies as it struggled to market its products in a market flush with cheap Chinese steel. This has resulted in a piling up of inventories and debt of the steelmakers. .
Tata's long-products division saw 1,200 redundancies, including 300 jobs at Dalzell and Clydebridge in Scotland, which are set to close.
Another 720 jobs are at stake at Tata's bar business around Rotherham.