Tata Steel in talks to sell struggling UK assets

Tata Steel is in talks with investment firm Greybull Capital to sell its struggling Long Products Europe business in the UK, the Indian steel giant said today.
Greybull Capital has signed a letter of intent with the Tata Steel, battered by low prices, to try to reach a deal to buy the business, which includes mills at Scunthorpe in east England, Lanakrshire in Scotland, Teesside in north-east England and in northern France.
"Tata Steel UK Ltd (TSUK), an indirect subsidiary company of Tata Steel Europe (TSE), announced the signing of a Letter of Intent with Greybull Capital to enter exclusive negotiations for the potential sale of its Long Products Europe business," Tata Steel said in a Bombay Stock Exchange filing.

The memorandum covers several UK-based assets including TSUK's Scunthorpe steelworks, mills in Teesside and northern France, an engineering workshop in Workington, a design consultancy in York and associated distribution facilities.
The task will also include Scottish mills in Dalzell and Clydebridge, which are currently being mothballed, the filing said.
Tata Steel Europe's Chief Executive Karl Koehler said: "This is an extremely critical time for the whole industry, and we have been working hard to explore all options that could provide a future for the Long Products Europe business."

"We will now move into detailed negotiations with Greybull Capital," Koehler said.

He, however, said that it is too early to give any certainty about the potential outcome of these negotiations.
The negotiations will centre on Tata Steel UK's Scunthorpe steelworks, mills in Teesside and northern France, Scottish mills in Dalzell and Clydebridge in Lanarkshire, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities.
The talks will begin after the Christmas holiday period and are expected to take about three months.
The long products business in Europe manufactures plates, sections, wire rod and semi-finished steel for different markets, including construction, ship-building and engineering, energy and wire drawers.

Tata Steel will continue to work closely with the trade unions and works councils and will communicate any relevant news to employees on an ongoing basis, he added.
Workers' unions have welcomed the announcement following steel industry job losses.
Rickhuss said, "Of course, the devil will be in the
detail of the deal and we will be seeking further discussions with both Tata Steel and Greybull to fully understand their intentions and the implications for steelworkers."
"We welcome any credible investor who has a vision for a sustainable business and is prepared to invest for the future."
There have been waves of job losses in the steel industry in the UK, which the sector has blamed on cheap Chinese imports and a collapse in prices.

In October, Tata Steel announced nearly 1,200 roles to be axed in Scunthorpe and Scotland.
The firm has about 4,700 employees in Long Products Europe, while Tata Steel Europe has nearly 30,000 employees across Europe, including about 17,000 in the UK.
In the meantime, TSUK and Long Products Europe business will continue to work closely with customers to deliver high-quality products, Koehler said.
TSE has been a hugely supportive investor in the UK steel market, having invested almost 1.5 billion pounds in its operations and the firm's aim is to make its European business globally competitive, he added.
Executive Chairman of the Long Products Europe business Bimlendra Jha said: "Today's announcement is the result of the huge effort put in by employees, trade unions and management to seek a future for the Long Products Europe business by creating a turnaround plan."

Earlier last month, Tata Steel had said it would sell its Long Products Europe business by the end of the current financial year ending March 2016.