India’s Tata Steel has agreed to sell its pipe mills in the north of England to UK-based metals and industrial group Liberty House for an undisclosed sum.
The mills in Hartlepool employ 140 people and have a production capacity of more than 250,000 tonnes a year.
Tata Steel, Britain’s largest steel maker, has been selling off parts of its UK business since 2016, when it announced talks to merge its British and European steel assets with those of Germany’s Thyssenkrupp.
“With this sale, Tata Steel UK will complete its portfolio restructuring to focus on the strip products supply chain linked to Port Talbot,” Bimlendra Jha, CEO of Tata Steel UK, said on Tuesday.
“The sale is also an important step towards developing a more sustainable future for the rest of our UK business.”
In February, Tata signed a £100m deal to sell its speciality steel business to Liberty House, saving 1,700 jobs.
Under Tuesday’s deal, Tata retained ownership of a tube mill in Hartlepool, which is supplied with steel coils from the European steel assets it wants to merge with Thyssenkrupp.
Tata, whose UK business is centred on the steelworks in Port Talbot, Wales, said it would invest £1m in the tube mill, which employs 270 people.
Privately owned Liberty, which plans to list some of its businesses in 2018, has been snapping up distressed steel assets around the world.
“This step will inspire investments not only in Hartlepool, but also in our upstream plate mill at Dalzell [Scotland], and potentially … at Whyalla in Australia in due course, to give us a fully integrated world-class capability to supply pipeline projects,” said Liberty executive chairman Sanjeev Gupta.
The Hartlepool pipe mills make heavy-duty steel piping for the oil and gas sector.
Liberty, which operates together with energy and commodities business Simec under the $9.4bn Gupta Family Group Alliance, said it was in talks to secure a support package to recruit more staff for the pipe mills business.
Gupta’s Liberty House is one of the largest industrial employers in the UK with a workforce of nearly 5,000 people.
Following Tuesday’s deal, Tata remains the largest UK steel maker, with a workforce of 8,500 people.
The UK steel sector is emerging from a crisis, with 5,000 jobs, a fifth of the workforce, being axed in 2015-16. It is estimated that for every steel job saved, four jobs are retained in related industries.
Gupta first hit the headlines in 2016, when he offered to rescue all the distressed UK steel plants owned by Tata, but the Indian group eventually decided against selling its entire UK business in favour of a tie-up with Thyssenkrupp.
Source Link – Business Live