More than 4,000 steelworkers will have a new employer next week when Tata Steel completes the sale of its European long-products division to a little-known family investment office.
Greybull Capital will announce that it has finalised the takeover of the Tata Steel unit, which employs around 3,000 people at its base in Scunthorpe.
Sources confirmed this weekend that a £400m financing package required to complete the deal was in place – and that it was being provided entirely by private sector institutions, meaning that a mooted Government loan of up to £100m would not be part of the deal.
A statement confirming the change of ownership has been provisionally earmarked for next Wednesday, although the timetable remains subject to change, according to insiders.
The business will be immediately renamed British Steel, and Greybull believes that with a union agreement on pension costs and restructured deals with major suppliers in place, it can be profitable within a year.
The sale of Tata's long-products unit, which manufactures steel for use in the rail and construction industries, will come as the Indian-owned company continues to discuss the disposal of the rest of its British operations with prospective buyers.
A proposal tabled this week by the Business Secretary, Sajid Javid, to restructure the £15bn British Steel pension scheme has triggered fresh speculation that the company may decide to retain its 11 UK steel plants rather than offload them.
The pension proposals, which would cut the benefits paid to thousands of steelworkers and have sparked controversy over the possible precedent set for other struggling companies, are subject to a four-week consultation.
Source: sky.com