Tata Steel UK Limited signed an agreement to sell its Long Products Europe business to Greybull Capital for a nominal fee, and said the family investment office would take on the entire business, including assets and relevant liabilities and secure an appropriate funding package.
“The deal would be completed once a number of outstanding conditions have been resolved, including transfer of contracts, certain government approvals and the satisfactory completion of financing arrangements. The Long Products Europe business employs 4,800 people – 4,400 in the UK and 400 in France,” the company said in a statement.
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.”
The agreement follows an accelerated process of negotiations between Tata Steel UK and Greybull Capital, the statement said, adding that the sale covers several UK-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.
“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,” said Hans Fischer, Chief Executive of Tata Steel’s European operations.
Tata Steel Europe also announced it was starting the process of divesting its entire shareholding in Tata Steel UK following the recent advice from the Tata Steel Board to evaluate all options for the portfolio review.
It said KPMG LLP had been appointed as the advisers to the process, while Slaughter and May will be the legal advisers to the proposed transaction.
KPMG and Slaughter and May also advised Tata Steel UK on the successful divestment process of Longs Steel UK, the subsidiary of Tata Steel UK.