Tata sells Scunthorpe steel plant to investment firm Greybull Capital

The move will safeguard more than 4,000 jobs

The sun rises above Tata Steel's Scunthorpe Plant in north east England (AFP/Getty)

Tata Steel has sold its Long Products Europe business, including its Scunthorpe plant, to investment firm Greybull Capital in a move that will save more than 4,000 jobs, the company has confirmed.

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.

Greybull is reportedly lining up a £400 million investment package to turnaround the plant

Bimlendra Jha, Executive Chairman of the stand-alone Long Products Europe business, said the deal marks a "significant milestone” in the sale of the Long Products Europe business.

“This sale is the best possible outcome for employees who have worked relentlessly to ensure the business’s survival, and helped to make it attractive to a potential buyer,” he said.

Hans Fischer, Chief Executive of Tata Steel’s European operations, also welcomed the news.

"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 Capital have 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,” Fisher said.

The deal is expected to be completed in eight weeks once a number of outstanding conditions have been resolved, including transfer of contracts, certain Government approvals and the satisfactory completion of financing arrangements.

Following completion of the deal, the business will trade under the name British Steel.

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

Marc Meyohas, Greybull partner, said: “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.