Tata Sells European Long Products Operations

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Tata Steel Limited (Mumbai, India) has agreed to sell its steel operations in Scunthorpe, England, to investment firm Greybull Capital (London).

Scunthorpe is home to Tata's Long Products Europe (LPE) business, which employs around 4,400 people, with another 400 based in France. Greybull, which operates in Europe and the U.S., has put together an investment and financing deal worth £400 million ($569 million) for the business. The deal covers several U.K.-based assets including the Scunthorpe steelworks, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York and associated distribution facilities, as well as a mill in northern France. On completion, the business will operate under the new name, British Steel.

The announcement comes just a day after Tata officially launched the sales process of its U.K. steel operations. Last week, Industrial Info reported on the company's decision to sell off its entire, loss-making U.K. steel business. For additional information, see March 31, 2016, article--Tata Steel to Sell Struggling U.K. Operations.

Bimlendra Jha, executive chairman of the stand-alone Long Products Europe business, said: "Today marks a significant milestone in the sale of the Long Products Europe business. This sale is the best possible outcome for employees who have worked relentlessly to ensure the business's survival, and helped to make it attractive to a potential buyer."

Greybull said the agreement is an important milestone on the road towards continuing steelmaking in Scunthorpe and steel processing in other locations in the U.K. and France.

Hans Fischer, chief executive of Tata Steel's European operations, welcomed the news: "Under these current challenging market conditions in Europe with the soaring levels of imports from China, we are happy that Tata Steel U.K. and Greybull Capital have entered the final stage of completion of the sale of shareholding in Longs Steel U.K. This transaction will offer a future for the Long Products Europe business and its 4,400 employees in the U.K."

U.K. Business Secretary Sajid Javid commented: "Today's announcement is a step in the right direction for the long-term future of British steel manufacturing in Scunthorpe. This point wouldn't have been reached without the efforts of all those involved especially the high skilled workforce and local management. We will now look through the detail and stand ready to provide funding on a commercial basis if required. The U.K. and Welsh Governments are working tirelessly to ensure that we can now reach a deal for Port Talbot and the other Tata sites across the U.K.. This agreement sends positive signals to any potential investor for the rest of Tata's U.K. business."

Tata blamed its decision to exit the U.K. steel sector on continued weakness in the European steel sector and years of losses and cutbacks in its U.K. operations. High labour and energy costs also played a role.

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