Tata Steel is making yet another attempt to sell the struggling long products division of its UK subsidiary by entering into exclusive negotiations with Greybull Capital.
Tata Steel UK has signed a letter of intent with Greybull Capital for the potential sale of the long products Europe business, said the company in a statement on Tuesday.
In August, American billionaire Gary Klesch and owner of the Swiss-based Klesch Group pulled out of an 11-month negotiation to buy the Tata Steel unit, which has been tripped by expensive energy costs, cheap Chinese shipments and lack of government subsidies.
The new comprehensive agreement signed with Greybull Capital covers several UK-based assets including Tata Steel UK’s 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 Steel’s Scottish mills in Dalzell and Clydebridge which are currently being mothballed.
Karl Koehler, Chief Executive, Tata Steel Europe, 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..”
Having invested almost £1.5 billion in the UK steel business, the company aims to make the European business globally competitive.
Turnaround planBimlendra Jha, Executive Chairman of the long products Europe business, said the announcement is the result of effort put in by employees, trade unions and management to seek a future for the business by creating a turnaround plan.
Of the 17,000 people employed across the UK, the long products division provides job for about 4,700. Tata Steel Europe has about 30,000 employees.
Shares of Tata Steel were down 0.52 per cent at ₹257 on Tuesday.