Tata Steel has signed definitive agreements with U.K. based Liberty House for sale of its speciality steel business for total consideration of 100 million pounds that covers several South Yorkshire-based assets and service centres in U.K. and China.
The speciality steel business employs 1700 people making steel for the aerospace, automotive and oil & gas industries.
“This is good news for the speciality steels and for Tata Steel’s core business in the U.K. For speciality steels, which is largely independent of our European strip products supply chain, this is an important step forward in securing a future for the business under a new ownership,” said Bimlendra Jha, CEO of Tata Steel U.K., adding that the news also marks another important step forward in realising a more sustainable future for our Port Talbot-based supply chain in the U.K.
Tata Steel and Liberty House have worked constructively together to finalise the agreement and will also be working to complete consultation with employees and the transfer of suppliers and customer contracts, said a company statement adding that the completion of transaction remains subject to the receipt of necessary regulatory clearances.
“Like our former Scunthorpe-based long product business which we sold last year, we will be handing over a business which has been transformed following difficult decisions to structure and re-focus on higher value markets. Employees, trade unions and the management team have worked incredibly hard at speciality steels to improve its performance and I am delighted to say that the business in now on an improvement track which will enable it to thrive in the future,” Mr. Jha added.
“It’s good for Tata Steel, which has turned around in the December quarter. The sale of UK speciality business will further add to its profitability. Now it is to be seen if the company is able to find a solution to the UK pension scheme,” Paras Bothra, president equities at Aashika Stock Broking told The Hindu.
Tata Steel U.K. is currently consulting with its employees on a number of proposals that would structurally reduce risks and help secure a more sustainable future for its wider U.K. business. It is also in discussions with the British Steel Pension Scheme trustee and Pension regulator to develop a structural for its U.K. pension scheme in the coming months.
Shares of Tata Steel closed down 2.22% at ₹459.9 in a flat Mumbai market on Thursday valuing the company at ₹30,819.68 crore. The announcement came after the closure of market hours.