Tata Steel saves 4,400 jobs with sale of Scunthorpe site to Greybull Capital

Unions have welcomed the return of the British Steel brand

The sun rises above Tata Steel's blast furnaces at their Scunthorpe Plant in north east England (Getty)

The sale of Tata Steel’s Long Products business to Greybull Capital has been completed overnight, saving 4,400 jobs in the UK.

The news came more than seven weeks after the investment firm reached a purchase agreement with Tata Steel to acquire the Scunthrope-based Long Product Europe division.

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.The business will now trader under the name British Steel.

Workers have voted to accept a temporary 3 per cent pay cut and changes to terms and conditions as part of the deal.

Mr Bilmendra Jha, Executive Chairman of the Long Products Europe business and CEO of Tata Steel UK said the company is “delighted” to have secured a buyer.

“We hope that under Greybull ownership, the business will continue the momentum of the improvement program that has been initiated in the last 12 months,” Mr Bilmendra Jha said.

“Employees and trade unions have worked closely with the Long Products Europe management team to improve the business’s prospects, putting it in a more competitive position than it has been for many years,” he added.

Peter Hogg, British Steel commercial director said it has taken “efforts” and a “strong partnership” between employees and union representatives as well as customers and suppliers to get to this point.

“Our industry has faced challenging times over the last few years, but we are confident that our new venture, built on our core values of pride, passion and performance, will not only reinvigorate this business, but position it as a world leader,” Hogg said.

Greybull Capital has been in talks to buy the business for several months.

“We are delighted to have reached agreement for the acquisition of LPE, which we believe can become a strong business, with a highly skilled workforce and great potential,” Marc Meyohas, Greybull partner, said in April.

The investment firm came to public prominence as investors in OpCapita’s takeover of Comet, the electrical good chain, before its collapse in 2012.

Greybull also backed the retail veteran Mike Greene with the £25 million purchase of 140 convenience stores from Morrisons in September last year after the supermarket chain admitted it got into the convenience market too late.

The firm’s most recent acquisition, excluding Tata, is Monarch, the UK-based and budget airline company. Greybull injected £125 million into Monarch in return for a 90 per cent stake late last year.