Tata Steel has announced the sale of its long products division which it says will save its Scunthorpe steelworks, two Teesside mills as well as other facilities across the UK.
Investment group Greybull Capital has bought the previously Indian-owned business in a deal that will see the British Steel brand rejuvenated and could save 4,400 jobs.
It has been reported that Greybull will pay a token fee of £1 or €1 for Tata’s Long Products Europe (LPE) division as part of an agreed deal that will see it take on the firm’s liabilities and put together a £400m funding package to keep the business going.
This will ensure that the steelworks in Scunthorpe, 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, will all remain open.
Employees will be expected to take a pay cut and see changes to their pension scheme as part of the existing turnaround proposals put in place by Tata before it agreed the sale.
The buyout will also see the relaunch of the British Steel brand that disappeared in 1999 when Corus bought out the company, later to be sold to Tata.
This sale does not include the rest of Tata’s UK business, which includes the plant at Port Talbot, currently employing around 15,000 staff.
Tata says it is still seeking a buyer for its Port Talbot plant and it has been reported that the Government would consider co-investing with a private sector partner to help save this part of its business.