April 11, 2016
Tata Steel UK agrees on sale and purchase agreement for long products Europe business
Tata Steel UK today announced the signing of an agreement to sell its long products Europe business to the family investment office, Greybull Capital.The sale for a nominal consideration, would be in exchange for Greybull Capital taking on the whole of the business, including assets and relevant liabilities, and securing an appropriate funding package.
The deal would be completed once a number of outstanding conditions have been resolved, including transfer of contracts, certain government approvals and the satisfactory completion of financing arrangements. The long products Europe business employs 4,800 people – 4,400 in the UK and 400 in France.
Bimlendra Jha, executive chairman of the stand-alone long products Europe business, said:“Today marks a significant milestone in the sale ofthe long products Europe business. This sale isthe best possible outcome for employees who have worked relentlesslyto ensurethe business’ survival, and helped to make it attractive to a potential buyer.”
The agreement follows an accelerated process of negotiations between Tata Steel UK and Greybull Capital who have workedconstructively together.The agreement is an important milestone on the road towards continuing steelmaking in Scunthorpe and steel processing in other locations in the UK and France.
The sale covers several UK-based assets including the Scunthorpe steelworks, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities, as well as a mill in northern France.
Hans Fischer, chief executive of Tata Steel’s European operations, also welcomed the news. He said: “Under these current challenging market conditions in Europe with the soaring levels of imports from China, we are happy that Tata Steel UK and Greybull Capitalhave entered the final stage of completion of the sale of shareholding in Longs Steel UK. This transaction will offer a future for the long products Europe business and its 4,400 employees in the UK.”