Tata Steel on Monday announced an agreement to sell its long products Europe business to investment firm Greybull Capital for a "nominal" consideration. The long products Europe business employs 4,800 people—4,400 in the UK and 400 in France.
"The sale for a nominal consideration, would be in exchange for Greybull Capital taking on the whole of the business, including assets and relevant liabilities, and securing an appropriate funding package," the company said in a statement.
"The deal will 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."
Long products include wire rods, rails and billets used by construction, engineering, energy and automotive industries. Flat products include coils, and heavy plates used for automotives, heavy machinery, pipes, tubes, construction, packaging and appliances.
"This sale is the best possible outcome for employees who have worked relentlessly to ensure the business’s survival, and helped to make it attractive to a potential buyer," said Bimlendra Jha, executive chairman of the stand-alone long products Europe business.
The pact follows an accelerated process of talks between Tata Steel UK and Greybull Capital, and considered an important milestone on the road toward continuing steelmaking in Scunthorpe and steel processing in other locations in the UK and France.
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.
"Under these current challenging conditions in Europe with soaring levels of imports from China, we are happy Tata Steel UK and Greybull Capital have entered the final stage of completion of the sale of shareholding in longs steel UK," said Hans Fischer, chief executive for Tata Europe.
"This transaction will offer a future for long Products Europe business and its 4,400 employees.”
Having suffered nearly $3 billion in losses on its UK operations, Tata Steel had said this month that it will explore options to put its entire portfolio there up for sale, some 10 years after it forayed into Europe by acquiring the Anglo-Dutch Corus for over $8.1 billion.