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Britain finds buyer for Tata’s steel factory
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TATA Steel agreed to sell one of its main British steelworks to investment firm Greybull Capital for 1 pound (US$1.43) yesterday, saving a third of the 15,000 jobs placed in jeopardy by the Indian conglomerate’s decision to sell up in Britain.
Prime Minister David Cameron has been under pressure to keep the plants open to save jobs after Tata, one of the world’s biggest steelmakers, said on March 30 that it would sell its loss-making British business.
As Tata formally announced the sale of its steel assets in Britain, turnaround specialist Greybull Capital said it would buy the Indian company’s Long Products Europe division in Scunthorpe, northern England, which employs 4,400. It declined to rule out further purchases of Tata’s British steel assets, including its plant at Port Talbot in Wales.
The sale to Greybull includes a 400-million-pound investment and financing package for the Scunthorpe business, as well as deals with suppliers and unions on cutting costs.
“We’re expecting no redundancies going forward, the business plan calls for no redundancies,” Greybull co-founder Marc Meyohas said on a conference call.
The Greybull deal, which is subject to a ballot by union members, includes two additional mills, an engineering workshop and a design consultancy in Britain, plus a mill in Hayange, in northeast France.
The purchase will see the business renamed “British Steel,” in a revival of a historic name last used almost two decades ago.
Cameron, already grappling with a divided ruling party ahead of a June 23 referendum on membership of the European Union, has been trying to find buyers for Tata’s Scunthorpe plant and its other main plant at Port Talbot, to save jobs.
Britain’s euroskeptic media has blamed Brussels for preventing London from taking greater steps to protect the steel industry while the opposition Labour Party has called on Cameron to do more to save the plants.
Tata, which owns iconic brands such as Jaguar Land Rover and Tetley Tea, is offloading its British steel operations, citing a global oversupply of steel, high costs and weak domestic demand.
The deal for the Scunthorpe plant, which Tata had been trying to sell since 2014 before revealing talks with Greybull were underway in December, is expected to complete in eight weeks subject to certain conditions being met.
Greybull, which is not taking on pension liabilities, said about half of the 400 million pound package would come from shareholders of Greybull and half from banks and government loans.
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