New deal secures future of Tata Steel Scunthorpe plant

Tata Steel has announced that it has sold its Long Products Business to family investment firm Greybull Capital, in a deal that will save over 4,000 jobs.

The deal will see Greybull only pay a nominal fee for the Indian conglomerate’s long-products arm, of which the Scunthorpe plant forms the core.

As well as the the Scunthorpe steelworks, the sale also includes a design consultancy in York, two mills in Teesside, an engineering workshop in Workington, and associated distribution facilities, as well as a mill in northern France.

As part of the deal, it is believed that Greybull Capital will use a £400m funding package to keep the business going, which will be rebranded as ‘British Steel’.

Hans Fischer, chief executive of Tata Steel’s European operation, said: “Under these current challenging market conditions in Europe with the soaring levels of imports from China, we are happy that Tata Steel UK and Greybull Capital have entered the final stage of completion of the sale of shareholding in Longs Steel UK.

“This transaction will offer a future for the Long Products Europe business and its 4,400 employees in the UK.”

Roy Rickhuss, General Secretary of the steelworkers’ union, Community, added: “We welcome this major step forward towards a deal which will continue steel making in Scunthorpe and secure the future of the Long Products business across the UK.

“Greybull’s interest in the business is testament to the skills, experience and commitment of UK steelworkers and demonstrates that with the right investors UK steel making can have a positive future. So far, Tata Steel has honoured its commitment to be a responsible seller of the business by allowing time for the deal to be done.

“There are still crucial steps to be taken to complete the deal and all parties involved need to retain their focus towards achieving the objective of securing the future of Long Products. Community’s independent experts, Syndex, have assessed that the transformation plan for the business is robust and Greybull has the necessary capabilities to build a sustainable business. The deal alone will be a huge boost to the UK steel industry but more government action to support our industry will be needed to ensure its sustainable long-term future.”

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →