Tata Steel just completed the sale of part of its struggling UK business to family office Greybull Capital for a “nominal sum.”
The deal for Tata’s so-called “Long Products Business” covers 4,800 jobs and assets including “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,” according to the initial release on the deal.
The Financial Times reported that the deal completed on Wednesday. The paper says the deal saves 4,400 jobs in the UK.
Indian company Tata has been in talks with potential buyers of its UK business since putting its business here up for sale at the end of March.
While this deal brings certainty to many employees, there are still many factories and jobs in limbo. Tata is still in talks with multiple parties about buying the rest of its UK steel business, most notably the Port Talbot operation in Wales.
Business Secretary Sajid Javid is also involved in the discussions and it trying to lessen Tata Steel’s pension deficit, which is putting off buyers. The company has a £485 million ($702 million) shortfall in its scheme and workers face having their future payouts reduced as Javid considers moving the pensions from being pegged to the consumer price index (CPI) measure of inflation to the lower retail price index (RPI). This would require a change in the law.
The assets Greybull bought off Tata Steel UK will be rebranded “British Steel,” a name it was known by prior to its takeover by Tata. Greybull will invest £400 million in the new company, according to the Financial Times.
Hans Fischer, Chief Executive of Tata Steel’s European operations, said at the time the deal was first announced:
Under these current challenging market conditions in Europe with the soaring levels of imports from China, we are happy that Tata Steel UK and Greybull Capital have entered the final stage of completion of the sale of shareholding in Longs Steel UK. This transaction will offer a future for the Long Products Europe business and its 4,400 employees in the UK.