Tata Steel in talks to sell struggling UK assets

London/Mumbai: 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 Tuesday.

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.

Roy Rickhuss, general secretary of the Community steelworkers' union, said, "We welcome the interest from Greybull in giving Long Products a future outside Tata Steel."