Greybull Capital Acquires Tata Steel, Revives British Steel, Saves Jobs
Tata Steel sold its UK long products business for £1 to Greybull capital in an agreement that will bring back British Steel brand while saving 4,400 jobs. The investment group bought the Indian company's Long Products Europe division located in Scunthorpe, northern England.
Since the latter part of 2015 Greybull and Tata had been negotiating on the sale of its long products business. The deal excludes the Port Talbot steelworks or the rest of Tata's UK business employing about 15,000 staff where it seeks buyer after announcing its sale last month.
The deal will keep open in Scunthorpe a steelworks; there will be two mills in Teesside and an engineering workshop in Workington. There will also be a mill in northern France and a design consultancy and associated distribution facilities in York, as reported by The Guardian.
The Scunthorpe plant deal that Tata tried to sell since 2014 before announcing talks with Greybull were already in process in December and expected to be completed in 2 months subject to certain conditions being met. The purchase will revive the brand 'British Steel', a historic name last used almost 20 years ago.
"We're expecting the company to be profitable in year one and that's very much the management plan," said Meyohas, who co-founded Greybull in 2008 after 12 years as CEO of technology services company Cityspace.
The sale to Greybull with a nominal pound or €1 will include a £400 million financing package and investment for the Scunthorpe business along with agreements with suppliers and unions on cutting costs, according to Daily News & Analysis.
Tata Steel almost has $4 billion or Rs 26,500 crore debts on its UK balance sheet out of the overall consolidated debt of nearly $11.3 billion or Rs 75,000 crore. No debt information related to individual steelmaking facilities in the UK had been disclosed, reports The Economic Times.
Steelworkers embraced the rescue plan after two years of doubt but asked the government's support for the industry's recovery.