Britain finds a buyer for one Tata steel plant, saving a third of jobs at risk

Mon Apr 11, 2016 1:22pm EDT
 
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By Guy Faulconbridge and Sarah Young

LONDON (Reuters) - Tata Steel (TISC.NS: Quote) agreed to sell one of its main British steelworks to investment firm Greybull Capital for 1 pound on Monday, saving a third of the 15,000 jobs placed in jeopardy by the Indian conglomerate's decision to sell up in Britain.

Prime Minister David Cameron has been under pressure to keep the plants open to save jobs after Tata, one of the world's biggest steelmakers, said on March 30 it would sell its loss-making British business.

As Tata formally appointed advisers for the sale of its steel assets in Britain, turnaround specialist Greybull Capital LLP said it would buy the Indian company's Long Products Europe division in Scunthorpe, northern England, which employs 4,400.

It declined to rule out further purchases of Tata's British steel assets, including its plant at Port Talbot in Wales, while British Business Secretary Sajid Javid said the government would consider jointly investing with a buyer to secure the sale of the Indian group's other UK assets.

"I've been in contact with potential buyers, making clear that the government stands ready to help," Javid told parliament. "This includes looking at the possibility of co-investing with a buyer on commercial terms."

The sale to Greybull - for a nominal pound or 1 euro - includes a 400 million pound ($570 mln) investment and financing package for the Scunthorpe business, as well as agreements with suppliers and unions on cutting costs.

"We're expecting no redundancies going forward, the business plan calls for no redundancies," Greybull co-founder Marc Meyohas told reporters on a conference call.

The Greybull deal, which is subject to a ballot by union members, includes two additional mills, an engineering workshop and a design consultancy in Britain, plus a mill in Hayange, in northeast France.   Continued...

 
A general view shows the Tata Steel works in Scunthorpe, northern England, in this October 27, 2015 file photo.  REUTERS/Andrew Yates/Files