By: Eastern Eye Staff
Tata Steel UK has signed a £100 million ($126 million) deal to sell its speciality steel business to Liberty House Group, part of Indian owner Tata Steel Ltd’s drive to restructure its European operations.
The deal, which is subject to regulatory clearances, secures 1,700 jobs, mostly in South Yorkshire in the north of England, Britain’s largest steelmaker said in a statement on Thursday.
The speciality division is one of the world’s biggest suppliers for the aerospace industry, with customers including Rolls-Royce, Boeing and Airbus.
“This is an important step forward in securing a future for the (speciality) business. Today’s news also marks another important step forward in realising a more sustainable future for our Port Talbot-based supply chain in the UK,” said Bimlendra Jha, chief executive of Tata Steel UK.
On completion of the deal, Tata Steel will employ some 9,000 people in Britain, around half of them based in Port Talbot, Wales, home to Britain’s largest steelmaking plant.
Tata Steel Ltd, India’s biggest steelmaker by overall capacity, is currently in talks to merge its European operations, including its remaining UK businesses, with Germany’s Thyssenkrupp.
The success of the talks hinge on Tata getting regulatory approval to spin off its £15 billion pension scheme into a standalone entity, because Thyssenkrupp will not take on the UK unit’s pension liabilities in the event of a merger.
Tata Steel said it was seeking to develop a “structural solution for its UK pension scheme in the coming months”, and it was also consulting employees on how to secure a sustainable future for its remaining UK business.
The steelmaker’s UK employees have been balloted on closing the pension scheme to future accrual, with vote results due this month. But that is only the first step towards separation of a scheme that has 130,000 members.
Liberty House, part of the Gupta Family Group, expressed an interest in buying all of Tata Steel UK last year, before Tata Steel Ltd decided against a sale of the whole business in order to pursue a tie-up with Thyssenkrupp.