Indian conglomerate, Tata Steel is going to be renamed British Steel following the recent deal in which Tata agreed to the sale of its UK long products business to investment group, Greybull Capital for £1.
Founded by former Lehman Brothers investment banker Nathaniel Meyohas, Greybull has previously invested in charter airline Monarch and high street electricals retailer Comet.
After an enormous pressure, Prime Minister David Cameron has been able to save about 4, 800 British jobs with the acquisition.
The deal will keep open a steelworks in Scunthorpe, two mills in Teesside, an engineering workshop in Workington, a design consultancy in York, and associated distribution facilities, as well as a mill in northern France, according a Guardian UK report.
Greybull will take on the Tata’s liabilities and put together a £400m funding package to keep the business going.
The agreement, however, does not include the rest of Tata’s UK business, which employs about 15,000 staff.
The sale of Tata Steel to British brand has been a heated debate whether steel production has a future in Britain . While some believe that the spent British steel industry can be revived, others think it is not strategic. They argue that the days of military and industrial strategy are over and therefore is no longer economic. The UK, they reason, is no longer an industrial museum.
British Steel industry vanished in 1999 after it merged with a Dutch firm to become Corus, which was later bought by Tata.
A new research reveals that a complete collapse of Britain’s steel industry would cause as much damage to local economies as the end of coal mining in the 1980s.
But some industry watchers say the plants’ fate should be left to market forces and that the government should seek to invest in new industries instead of propping up a sector in which Britain has not been competitive for years.
Marc Meyohas, Nathaniel Meyohas’s brother and Greybull partner, Marc Meyohas was confident that the acquisition can become a strong business, with a highly skilled workforce and great potential.
“I would personally like to thank Tata Steel, the trade unions and the British and French governments for their support, which was essential in ensuring the agreement. We are now focused on taking the deal to completion in order that the business can start its next chapter with confidence,” he said.
Meyohas also holds that Greybull has some expertise in turnaround and helping firms through rough times. “We would expect Greybull to retain its steel interest until 2026 at the minimum. That’s the basis on which we invest – if in 10 years or more we’d still be happy with being shareholders,” according a statement in Guardian UK.
Tata Steel is the second-largest steel producer in Europe with a diversified presence across the continent. It has a crude steel production capacity of over 18 million tonnes per annum in Europe, but only 14 mtpa is operational. It also owns iconic brands such as Jaguar, Land Rover and Tetley Tea, but decided to divest its British steel operations, citing a global oversupply of steel and cheap imports from China, high costs and weak domestic demand.
Whether the acquisition is going to resuscitate the exhausted British steel industry is a matter yet to be seen.