Tata Steel may sell UK unit to Greybull Capital
Tata Steel UK has signed a letter of intent with Greybull Capital, an investment company, to enter exclusive negotiations for a potential sale of its long products Europe business. This development was revealed by Tata Steel, the largest steel producer in the country, on Tuesday. Tata Steel UK is an indirect subsidiary of Tata Steel Europe.
The memorandum covers several UK-based assets such as the Scunthorpe Steelworks, mills in Teesside and north France, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities. It also includes Scottish mills in Dalzell and Clydebridge, which are currently being “mothballed”, said Tata Steel in its notification to the exchanges.
“This is an extremely critical time for the whole industry, and we have been working hard to explore all options that could provide a future for the long products Europe business,” the notification said, quoting Karl Koehler, the chief executive of Tata Steel’s European operations. “In the meantime, Tata Steel UK and our long products Europe business will continue to work closely with customers to deliver high-quality products.”
The memorandum covers several UK-based assets such as the Scunthorpe Steelworks, mills in Teesside and north France, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities. It also includes Scottish mills in Dalzell and Clydebridge, which are currently being “mothballed”, said Tata Steel in its notification to the exchanges.
“This is an extremely critical time for the whole industry, and we have been working hard to explore all options that could provide a future for the long products Europe business,” the notification said, quoting Karl Koehler, the chief executive of Tata Steel’s European operations. “In the meantime, Tata Steel UK and our long products Europe business will continue to work closely with customers to deliver high-quality products.”
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Tata Steel’s Europe operations have been a hugely supportive investor in the UK steel market, having invested almost £1.5 billion in its operations.
Bimlendra Jha, the executive chairman of the long products Europe business, said, “The announcement is the result of the huge effort put in by employees, trade unions and the management to seek a future for the long products Europe business by creating a turnaround plan.”
About 4,700 people are employed at the long products division in Europe and its distribution facilities. Tata Steel Europe employs about 30,000 people across the continent, including about 17,000 in the UK.
Cheap Chinese exports of steel have crippled markets across the world, not sparing Europe. It is because of the relentless fall in steel prices amid huge supply that Tata Steel has had to take several cost-cutting steps, including planning to sell the long product division. In October, the company had slashed about 1,200 jobs in Europe in a bid to rein in costs in the challenging business environment.
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