Potential Buyer For Tata Steel Long Products Business
Tata Steel says it's signed a Letter of Intent with Greybull Capital for the potential sale of its Long Products business - which affects Scunthorpe steelworks.
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 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.
It also includes Tata Steel's Scottish mills in Dalzell and Clydebridge which are currently being mothballed. 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.
“Accelerating innovation on advanced steel solutions, helping our customers succeed in their markets and creating a sustainable asset base remain our strategic focus.
“Tata Steel has been a hugely supportive investor in the UK steel market, having invested almost £1.5 billion in its operations. Our aim is to make our European business globally competitive.”
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 cooperation with customers, suppliers and government, has enabled us to reach this stage, though much work remains to be done to reach a successful outcome."
900 people face losing their jobs at the Scunthorpe steelworks.
Responding to the announcement today that Tata Steel has signed a Letter of Intent with Greybull Capital to enter exclusive negotiations with a view to selling its Long Products Europe business, Roy Rickhuss, General Secretary of the steelworkers’ union Community, 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. Tata Steel must continue to uphold the pledge made by Tata Chairman Cyrus Mistry to be “a responsible seller.
“Nevertheless, as we have said all along, 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.”