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Over 4,000 UK steel industry jobs are set to be saved by the takeover of Tata’s plants at Scunthorpe and Teesside by investment groupGreybull Capital.
The deal will see the UK long products business being sold for a nominal £1 fee to Greybull and the British Steel brand being revived. It means the steelworks in Scunthorpe, two mills on Teesside, an engineering workshop in Cumbria and a design consultancy in York will all be saved. Also benefitting will be a mill in France and a number of distribution facilities.
Greybull and Tata had been in talks since late last year, predating the recent announcement by the Indian firm that it was divesting its loss-making UK business. The minimal payment was agreed in return for Greybull compiling a £400 million package to maintain the business and also taking on the pension fund liabilities of those on the payroll.
This has included changes to the pension scheme and a one-year pay cut of three per cent, which has been negotiated with the Unite union. Unite has recommended that its members vote in favour of the offer.
Greybull issued a statement saying: “Greybull believes these vital changes will make British Steel competitive. The trade union agreement is subject to a ballot of union members which will take place over the next few weeks.”
The long products business operates separately from the main UK Tata steelworks at Port Talbot in south Wales, where talks are continuing to find a way to keep the plant open and save 15,000 jobs.
Tata has revealed it has spoken to a number of potential buyers but would prefer a single one. The government has ruled out full nationalisation, but business secretary Sajid Javid has told MPs the government may opt to “co-invest” with a private sector partner in the plant.
He emphasised that the government “stands ready to help” any buyer that comes forward.
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