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Tata Steel today said it has inked an agreement with Liberty House Group, led by India-origin businessman Sanjeev Gupta, to start negotiations for sale of its UK Speciality Steels business for about Rs 854 crore.
Tata Steel UK today said it has signed a letter of intent (LoI) with Liberty House Group to enter into exclusive negotiations for the potential sale of its Speciality Steels business for an enterprise value of Great Britain Pound (GBP) 100 million".
The deal is subject to due diligence and corporate approvals, it added.
The LoI covers several South Yorkshire-based assets, including the Rotherham electric arc steelworks, the steel purifying facility in Stocksbridge and a mill in Brinsworth as well as service centres in Bolton and Wednesbury, UK, and Sozhou and Xi'an, China, it said in a statement.
Tata Steel UK CEO Bimlendra Jha said: "Speciality Steels business is independent of the pan-European strip products supply chain and today's announcement is in line with the overall restructuring strategy of the UK portfolio."
It is an important step forward in seeking a future for Speciality Steels and the firm looks forward to working with Liberty on the due diligence and other work streams so that the sale can be successfully concluded, he added.
"We will continue to work closely with trade unions and will communicate any material news on this issue to the employees on an ongoing basis," Jha said.
Jha also revealed that the Indian steel giant is actively seeking solution to the company's structural challenges.
"Among those challenges, there is need to develop a more sustainable business in the UK as well as a self-sustaining future for the British Steel Pension Scheme," he said.
The firm on Monday also revealed plans to pursue 85 million pounds worth of capital investments covering a range of "sustenance and improvement schemes".
The British Steel Pension Scheme has been a major obstacle to the future of the Tata Steel business in the UK.
It has liabilities of more than 15 billion pounds and 130,000 members, making it one of the biggest retirement schemes in the UK.
There has been speculation in the UK media over the company's plans to retain the bulk of its steel business under the interim chairmanship of Ratan Tata.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)