Tata Steel in talks to sell business unit to Greybull Capital

Tata Steel UK has announced the signing of a letter of intent with Greybull Capital to enter exclusive talks for the potential sale of its long products business unit.

The steelmaker said the letter covers UK-based assets including the Scunthorpe steelworks, mills in Teesside and northern France, an engineering workshop in Workington, a design consultancy in York and associated distribution facilities.

It also includes Tata’s Scottish mills in Dalzell and Clydebridge which are currently being mothballed.

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.”

Tata said it will continue to work closely with its trade unions and works councils and will communicate any relevant news to employees on an ongoing basis.

The UK steel industry has been in the spotlight lately as it struggles to combat declining prices, cheap Chinese imports and high electricity costs.

At least 4,000 people have lost their jobs in the past few months following a number of closures of steel plants including in Redcar, Scunthorpe and Lanarkshire.

On Monday, a report from the Business Innovation and Skills (BIS) Committee concluded that the UK government has failed to do enough to help the steel industry to counter the effects of falling prices.