Tata Steel has taken a major step towards finding a buyer for its European long products arm in a move that could help save thousands of steelworkers’ jobs.
The steel giant’s UK arm has signed a letter of intent with Greybull Capital giving the private equity firm the right to enter into exclusive negotiations over the potential sale of the long products business.
The letter covers a number of UK assets, including its Scunthorpe plant, pictured, and mills at Dalzell and Clydebridge in Scotland, all of which stopped production earlier this year.
The end of production resulted in a total of 1,200 jobs being lost across the three plants. However, a successful sale would help save the jobs of the 4,700 staff still employed in Tata’s European long products division.
European operations 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. It is too early to give any certainty about the potential outcome of these discussions.
“We will continue to work closely with our trade unions and works councils and will communicate any relevant news to employees on an ongoing basis.
“In the meantime, Tata Steel and our long products Europe business will continue to work closely with customers to deliver high-quality products.”
Bimlendra Jha, executive chairman of the long products Europe business, added: “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.
“The development of this plan, in co-operation with customers, suppliers and government, has enabled us to reach this stage, though much work remains to be done to reach a successful outcome.”
As well as the mothballing of Tata’s facilities, the industry also seen the closure of SSI’s Redcar plant, resulting in 2,200 job losses.
The news of a possible rescue plan for Tata’s UK steel plants comes a day after a committee of MPs said the government had not done enough to protect the industry.
The business, innovation and skills select committee said the government had failed to protect UK manufacturers from the threat posed by cheaper imports, notably from China.
Committee chair Iain Wright said: “For too long the government failed to be alert to the alarms raised by the industry and act at home to maintain a steel industry in the UK when other European countries were acting to safeguard their own strategic steel industries.
“Industry isn’t looking for a handout; it’s looking for a level playing field. For too long there was little action from the government, with some asks from the industry taking years, if at all, to deliver.”
- This article first appeared on the website of our sister title Construction News