£100m deal could reprieve Tata jobs New move to save speciality steels business
TATA Steel has moved a step closer to striking a £100 million deal which could save dozens of jobs in the Black Country.
The steel group, part of the same conglomerate which owns Jaguar Land Rover, has been trying to offload its loss-making UK arm since March and has signed a socalled ‘Letter of Intent’ with commodities trading firm Liberty House.
This means the two companies will enter a period of exclusive negotiations for the potential sale of Tata’s ‘speciality steels’ business for an enterprise value of £100 million. It includes Tata’s service centre in Wednesbury where it employs around 50 staff.
The letter also covers several other sites in South Yorkshire, Bolton and a pair of plants in China but it does not include its coated narrow strip plant in Walsall.
Liberty House, which has been linked with Tata Steel UK for months, also rescued struggling engineering group Caparo last year, saving around 300 jobs in Oldbury and Bilston.
The speciality steel division employs around 1,700 people, making steel for the aerospace, automotive and the oil and gas industries while around 800 people are employed across the two plants in Wednesbury and Walsall.
Talks over the sale of the UK arm of the global steel group have gone quiet in recent months with reports in July suggesting it was considering a joint venture with German group Thyssenkrupp.
Tata Steel previously said it had been hit by the high costs of manufacturing and climate change policies along with cheaper foreign imports flooding the markets.
Tata Steel UK’s chief executive Bimlendra Jha said: “The speciality steels business is independent of the pan-European strip products supply chain and this 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. We now look forward to working with Liberty on the due diligence and other work streams so that the sale can be successfully concluded.
Tata Steel UK said it had invested £1.5 billion of capital over the past nine years and the company was pursuing a transformation plan to create a sustainable future for its UK strip products business.
Trade union Unite has called for an independent audit of the planned deal with Liberty House, saying it is concerned about job security and the future of the pension scheme.