Tata enters into exclusive negotiations on £100m deal

TATA Steel has taken a big step forward to a £100m deal for the sale of its speciality steels business after signing a letter of intent with Liberty House Group.

The UK division of the Indian group has entered into exclusive negotiations for the “potential sale” of the business for an enterprise value of £100m.
 
Around 1,700 people are employed within Tata’s speciality steels business in the UK.

The deal covers several South Yorkshire-based assets including the Rotherham electric arc steelworks, the steel purifying facility in Stocksbridge and a mill in Brinsworth. It also covers operations in Wednesbury, West Midlands, plus service centre in Bolton and three in China.

Bimlendra Jha, chief executive of Tata Steel UK, said: “The Speciality Steels business is independent of the pan-European strip products supply chain and today’s announcement is in line with the overall restructuring strategy of the UK portfolio.

“This is an important step forward in seeking a future for Speciality Steels and we have reached this stage thanks to the efforts of employees, trade unions and management.”

Metals group Liberty House made a high-profile investment in the UK steel industry when it bought the majority of Caparo Industries’ assets from the administrators a year ago.

Trade union Unite said that job security and the future of the pension scheme are “key priorities” following Tata’s announcement and that the “the devil will be in the detail.”

Unite national officer for metals Harish Patel said: “Today’s announcement is welcome as we can at last see some movement towards certainty for our members – our key concerns are job security for the workforce; the future of the British Steel pension scheme; and what the investment plans will be from the Liberty House Group going forward.
 
“Of course, the devil is very much in the detail which is why we will be asking Tata Steel to ensure that we can conduct independent due diligence on its proposals. 
 
“As a matter of urgency, we must see security for the pension scheme to which men and women have dutifully contributed all their working lives.”

He said that Unite’s hardworking members, their families and their local communities have lived with a “dark cloud of uncertainty hanging over them for more than a year.” 
 
“Despite these difficulties our members have continued to work hard and to deliver what has been asked of them by Tata Steel,” he said.
 
“For months the joint steel unions have been in discussions with the company and government at the highest levels to secure a sustainable future for all the UK businesses.
 
“The future of a strong and vibrant UK steel industry should be the cornerstone of the government’s much-heralded industrial strategy.”