Tata completes sale of long steel business to Greybull for £1
01 June 2016
Tata Steel has completed the sale of its long products business to Greybull Capital, in a deal that will preserve 4,400 UK jobs and revive the British Steel name.
Tata started talks with Greybull about the sale in December, three months before the Indian conglomerate decided to sell its entire UK business.
Greybull, an investment firm, has paid a nominal £1 for the business, which makes products such as railway tracks and steel used in construction (See: Greybull to buy Tata's UK long steel arm for £1). The sale includes the steelworks in Scunthorpe, Lincolnshire, and the long products business also includes sites in Teesside, Workington and York, and employs about 400 people in France.
Workers accepted a temporary 3-per cent pay cut and changes to terms and conditions in April as part of the deal to salvage the business, which will be renamed British Steel. The brand of the former state-owned industry disappeared in 1999 because of a merger between British Steel and Koninklijke Hoogovens leading to the creation of Corus, which Tata bought in 2007.
Announcing the completion of the deal, Tata made no mention of its attempt to sell its remaining UK steel assets, which employ about 11,000 people and include the blast furnaces at Port Talbot in south Wales.
Bidders submitted proposals to buy the business last week. The UK government has offered to provide loans and guarantees to a buyer and has urged Tata to allow time for a deal to be done. Tata is also considering keeping the business in light of the government's support package.
Bimlendra Jha, chief executive of Tata Steel UK, said, ''As a responsible seller, Tata Steel is delighted to have secured a buyer for this business and we hope that under Greybull Capital ownership, the business will continue the momentum of the improvement programme that has been initiated in the last 12 months.
''Employees and trade unions have worked closely with the long products (Europe) management team to improve the business's prospects, putting it in a more competitive position than it has been for many years.''
Greybull said the long products business had returned to operating profit in the past two months as the result of a turnaround plan that included making higher value products.
The firm, founded in 2008 by the French-born brothers Nathaniel and Marc Meyohas, said it had £400 million ready to invest in the business.
Paul McBean, chairman of the multi-union committee at the Scunthorpe works, said, ''Getting to this point has taken months of work and commitment from our workforce and I thank them for their support and dedication to the steel industry.
''I am delighted we are relaunching our fantastic business as British Steel. It marks a new start and a new chapter, for our business.''