Global giant Tata Steel today said it has inked a pact to sell its Specialty Steel business that employs 1,700 people to Liberty House Group for 100 million pound (about Rs 840 crore).
"Tata Steel UK has today signed a definitive sale agreement to sell its Specialty Steels business to Liberty House Group for a total consideration of GBP 100 million," Tata Steel said in a statement.
The pact covers several South Yorkshire-based assets including the electric arc steelworks and bar mill at Rotherham, the steel purifying facility in Stocksbridge and a mill in Brinsworth as well as service centres in Bolton and Wednesbury, UK and in Suzhou and Xian, China, it said.
Specialty Steel directly employs about 1,700 people making steels for the aerospace, automotive and the oil and gas industries.
Tata Steel UK's CEO Bimlendra Jha said: "This is good news for Specialty Steels and for Tata Steel's core business in the UK. For, Specialty 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 new ownership."
It also marks another important step forward in realising a more sustainable future for Port Talbort-based supply chain in the UK, he said.
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Jha said: "Like our former Scunthrope-based Long Products business which we sold last year, we will be handing over a business which has been transformed following difficult decisions to restructure and refocus on higher value markets."
Employees, trade unions and the management team have worked incredibly hard at Speciality Steels to improve its performance and the business is now on an improvement track which will enable it to thrive in future, he said.
The company said completion of the transaction remains subject to regulatory clearances.
It said the parties will also be working to complete consultation with employees and the transfer of supplier and customer contracts.
"Tata Steel UK is currently consulting with its employees on number of proposals that would structurally reduce risks and help secure a more sustainable future for its wider UK business," the company said.
It added that it is also in discussions with the British Steel Pension Scheme trustee and the Pension Regulator to develop a structural solution for its UK pension scheme in the coming months.
Tata Steel said it continues to support its UK business and its process of transformation to create a sustainable future for its UK strip products business.
Tata Steel's strip product business will continue to employ almost 9,000 people in the UK manufacturing advanced products for sectors like the automotive industry by utilising the capabilities of blast furnace steel making.
The steel giant said it has invested GBP 1.5 billion in its UK business since acquiring Corus in 2007, including GBP 85 million this year on a range of sustenance and improvement schemes.
Investments are ongoing to improve manufacturing capability, enabling the production of premium steels in Shotton, Llanwern, Trostre, and Orb in Newport, as well as environmental schemes for Port Tablot's power plant, it said.
Investment in packaging steels, electrical steels, an automotive finishing line, laser welding and next-generation coated products support the company's focus on making differentiated and advanced steel products for key manufacturers in the UK and elsewhere, it added.
