The good news for employees of Tata Steel UK’s Long Products Europe division, based in Scunthorpe, is that Greybull Capital, a British-based family investment business, has, according to an announcement just released, reached a binding sale and purchase agreement to buy the business in North Lincolnshire.
Included in the deal are the LPE steelworks in Scunthorpe, two steel mills in Teesside, an engineering workshop in Workington and a design consultancy in York, not forgetting the Hayrange steel mill in France. The deal also includes LPE’s associated sales and distribution network.
In roughly eight weeks from now, when the deal is completed, the business will be known as British Steel.
According to Greybull, a £400 million investment and financing package for the new business is being arranged.
“The financing, provided principally by a combination of banks and shareholders, will be available to fund working capital and future investments,” the company announced. “An agreement to reset the cost base of the business has been reached with key suppliers and, importantly, trade unions.”
Mark Meyohas, a partner of Greybull, commented: “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.”
The news that Greybull had effectively ‘signed on the dotted line’ means that more than 4,000 jobs will be saved, although workers have been asked to accept a 3% pay cut and, according to a news report on the BBC News website, ‘less generous pension arrangements’.
Connor Campbell, a senior market analyst at spreader.com commented: "There was tentative good news for the UK’s steel industry this Monday, with investment group Greybull Capital set to buy Tata Steel’s works in Scunthorpe, Teeside, Workington and York, saving 4,400 jobs in the process while also reviving the British Steel brand. Yet there is still a long way to go before the steel sector can have a caveat-less smile on its face, the issue of Port Talbot and the rest of Tata’s UK presence (which comprises around 15,000 jobs) still being up in the air."