LONDON – Tata Steel on Monday agreed to sell its European long products unit to a London investment firm, safeguarding 4,800 jobs in England and France at a time when European steelmakers are struggling to survive amid a wave of cheap imports.
The sale of Tata's Scunthorpe works in northern England and associated operations to Greybull Capital has been nine months in the making and is separate from the U.K. government's effort to save Tata's Port Talbot plant in south Wales. It will be rebranded as British Steel upon completion of the deal in eight weeks.
Tata said the unit, which makes plates, rods and semi-finished steel for industries such as construction and shipbuilding, will be sold for a nominal sum, though Greybull will take on "relevant liabilities." Greybull said it is arranging a 400 million pound ($569 million) investment and financing package.
"We are now focused on taking the deal to completion in order that the business can start its next chapter with confidence," said Marc Meyohas, a Greybull partner.
The British government has been scrambling to shore up the country's steel industry since March 30, when Tata announced plans to sell other U.K. plants, which employ almost 20,000 people. The steel industry has been hit by cheap Chinese imports that have depressed prices. Steelmakers are demanding that the European Union impose anti-dumping duties.
Announcement of the sale came hours before Business Secretary Sajid Javid was expected to address the House of Commons on efforts to find a buyer for Tata's other U.K. businesses, including Port Talbot, the country's biggest steel plant.
Tata Steel on Monday started the formal process of selling its other U.K. operations. So far, London-based Liberty House is the only company to express interest in Port Talbot.
Tata is losing 1 million pounds a day in Britain, the U.K. government has said. A sale or restructuring would likely involve heavy job losses in places like Port Talbot, where Tata employs 5,500 people.