Tata Steel mulls loan to aid sale of UK unit
Steelmaker in talks to provide working capital facility to private equity firm Greybull to help seal deal
Tata Steel Ltd, which is trying to sell its European long-products steel business to Greybull Capital LLP, is in talks to provide a working capital loan of as much as $400 million (Dh1.46 billion) to the private equity firm to help seal the deal, people with knowledge of the matter said.
The two companies, which entered into exclusive talks for the sale in December, have assured trade unions that employees will not be laid off at the plants, one of the people said, asking not be identified because the discussions are private. The agreement covers Tata Steel’s Scunthorpe steelworks in England, as well as mills in Teesside and northern France.
Price collapse
Tata Steel wants to sell its UK operations amid a collapse in prices of the alloy as Chinese demand slows for the first time in a generation, spurring local mills to flood markets with record exports.
Klesch Group withdrew from talks to buy the unit in August saying the industry was “bleeding to death”.
Tata Steel, which bought Corus Group Plc for about £6.2 billion ($8.9 billion; Dh32.45 billion) in 2007, has been cutting operations in the UK since the 2008 global financial crisis.
The country’s industry has been further hit by the Chinese-driven crisis in international markets with plants closing and thousands losing their jobs. Tata Steel had a debt of $10.96 billion as of September 30, according to data compiled by Bloomberg.