Tata agrees to sell UK Long Products ops to Greybull

In a statement, Tata said Greybull would take on the whole of the business, including assets and relevant liabilities, and be responsible for "securing 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," Tata said.

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.

Tata's European operations chief executive Hans Fischer welcomed the agreement.

“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.”

Gareth Stace, director of industry body UK Steel warned that the Greybull deal did not mean "we are out of the woods yet".

"A long term investor is needed, in the very short term, for the remainder of the whole of the Tata Steel UK business, including Port Talbot. We must also remember that the crisis that we are in is not confined to just the Tata Steel businesses, but the sector as a whole," he said.

Stace said the UK government still needed to "take every action possible to ensure British steel can once again complete on the global market place. This includes pushing the European Commission to continue its steel dumping investigations ensuring that tariffs are set at an appropriate level".

“Government must be prepared to provide time limited, life support to our sector. Without this, the future of steelmaking in Britain could be limited.”

The BBC reported that Greybull would invest up to £400m in the Scunthorpe plant but workers would have to accept a 3% cut in pay and freeze in pensions to save more than 4,000 jobs.

Tata in March said it was selling all it's UK plants, blaming high energy costs and oversupply due to Chinese dumping of cheap steel.

Tata employs 15,000 workers in the UK, across plants in Port Talbot, Rotherham, Corby and Shotton. Thousands more along the supply chain are dependent on them.

The only other expression of interest has come from Liberty House, whose chief Sanjeev Gupta, is interested in the Port Talbot operation.