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Tata Steel In Talks Over Sale
Tata Steel has signed a Letter of Intent with Greybull Capital for the potential sale of its Long Products business.
Tata said the move will lead to exclusive negotiations with the investment firm and covers Scottish mills in Dalzell and Clydebridge which are currently being mothballed, several UK-based assets including the Scunthorpe steelworks, mills in Teesside and northern France, an engineering workshop in Workington, and a design consultancy in York.
Unions welcomed the announcement, following a spate of job losses in the steel industry and fears for the future of Tata's Long Products business.
Karl Koehler, chief executive of Tata Steel's European operations, said: "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.
"We will now move into detailed negotiations with Greybull Capital. It is too early to give any certainty about the potential outcome of these discussions.
"We will continue to work closely with our trade unions and works councils and will communicate any relevant news to employees on an ongoing basis.
"In the meantime, Tata Steel and our Long Products Europe business will continue to work closely with customers to deliver high-quality products.''
Bimlendra Jha, executive chairman of the Long Products Europe business, said: "Today's announcement is the result of the huge effort put in by employees, trade unions and management to seek a future for the Long Products Europe business by creating a turnaround plan.
"The development of this plan, in co-operation with customers, suppliers and government, has enabled us to reach this stage, though much work remains to be done to reach a successful outcome.''
About 4,700 people are employed at Long Products Europe and its distribution facilities.
Tata Steel Europe employs around 30,000 people across Europe, including about 17,000 in the UK.
Greybull said in a brief statement: "Greybull Capital LLP confirms that it has signed a Letter of Intent with Tata Steel to enter exclusive discussions on the possible acquisition of the Long Products Europe business based in Scunthorpe, North Lincolnshire.
"Whilst this is an important milestone, much work remains to be done to reach a successful outcome.''
Roy Rickhuss, general secretary of the Community steelworkers' union, said: "We welcome the interest from Greybull in giving Long Products a future outside Tata Steel. Of course the devil will be in the detail of the deal and we will be seeking further discussions with both Tata Steel and Greybull to fully understand their intentions and the implications for steelworkers.
"We welcome any credible investor who has a vision for a sustainable business and is prepared to invest for the future. It's this sort of long-term commitment that will give the unions and the workforce the confidence that they want to make a success of the business and secure steel jobs at the Long Products sites.
"There is a highly skilled and experienced workforce within Long Products, who have consistently delivered in the face of a difficult global market. The steelworkers are the bedrock of the business and are an asset to any investor.
"Now we want to see all stakeholders, particularly the Government, fully focused on establishing a sustainable future for the Long Products business so it can continue to fill its role as a vital foundation industry that produces world-class steel and has provided secure employment for generations.''
"It is also clear from today's announcement that any future for the Dalzell and Clydebridge mills in Scotland will be with a different investor. Again, this should bring renewed focus to the work of the Scottish Government's Task Force in ensuring that the skills and assets are preserved and a buyer is found.''
David Hulse, national officer of the GMB union, said: "GMB see this news as a welcome development. The next step is the due dillegence process and we expect local GMB representatives to be fully involved.
"This is an exceptionally challenging time for the UK steel industry. It is essential that the UK Government plays a full part in securing a level playing field to enable this essential industry to survive and thrive.''
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