Tata Steel is in talks with investment firm Greybull Capital to sell Long Products Europe business in the UK, the Indian steelmaker said today.
"Tata Steel UK Ltd (TSUK), an indirect subsidiary company of Tata Steel Europe (TSE), today announced the signing of a Letter of Intent with Greybull Capital to enter exclusive negotiations for the potential sale of its Long Products Europe business," Tata Steel said in a regulatory filing.
The memorandum covers several UK-based assets including TSUK's Scunthorpe steelworks, mills in Teesside and northern France, an engineering workshop in Workington, a design consultancy in York and associated distribution facilities.
The task will also include Scottish mills in Dalzell and Clydebridge, which are currently being mothballed, the filing said.
Tata Steel Europe's Chief Executive Karl Koehler said: "This is an extremely critical time for the whole industry, and we have been working hard to explore all options that could provide a future for the Long Products Europe business."
The firm will now move into detailed negotiations with Greybull Capital, he further said adding "It is too early to give any certainty about the potential outcome of these negotiations."
The long products business in Europe manufactures plates, sections, wire rod and semi-finished steel for different markets, including construction, ship-building & engineering, energy and wire drawers.
Tata Steel will continue to work closely with the trade unions and works councils and will communicate any relevant news to employees on an ongoing basis, he added.
In the meantime, TSUK and Long Products Europe business will continue to work closely with customers to deliver high-quality products, Koehler said.
TSE has been a hugely supportive investor in the UK steel market, having invested almost 1.5 billion pounds in its operations and the firm's aim is to make its European business globally competitive, he added.
Executive Chairman of the Long Products Europe business Bimlendra Jha said: "Today's announcement is the result of the huge effort put in by employees, trade unions and management to seek a future for the Long Products Europe business by creating a turnaround plan."
About 4,700 people are employed at Long Products Europe and its distribution facilities. Tata Steel Europe employs about 30,000 people across Europe, including about 17,000 in the UK.
Earlier last month, Tata Steel had said sell its Long Products Europe business by the end of the current financial year ending March 2016.